Market in Focus: Gas Ships
Liquefied natural gas (LNG) shipping hasn’t been able to avoid the negative impact of COVID-19 as gas demand fell during the first quarter of 2020.
The residential sector recorded the largest drop in consumption this year compared to 2019 which wasn’t helped by the mild winter seen in the US. The shut-downs of major economies and more specifically shut-ins of cargoes due to the historically low gas prices means we have basically witnessed demand destruction.
LNG rates have fallen since the beginning of the year with the one-year time charter dropping by 80%. Figures back in January were circulating around the 80,000 USD/day mark whereas today we are only seeing earnings of $16,000/day.
Larger liquefied petroleum gas (LPG) vessels have also suffered since the beginning of the year with a fall in values. Rates for large LPG carriers fell by 35%. Crude prices fell throughout March, making LPG less competitive for petrochemical producers and reducing overall demand for LPG. However, we are seeing a higher demand for propane from Chinese plants, where things are beginning to get back to normal and restrictions after COVID-19 lockdown are gradually being lifted.
Other stories from June 2020 issue
- Training Tips for Ship #13: How's Your Training? You Can't Know Unless You Ask! page: 8
- Marine Salvage and SMFF Regulations page: 10
- Responder Immunity: The Means to Protect the Salvor in “Bet the Company” Responses page: 14
- Ferry Operators Start to See the Light at the End of the Tunnel page: 16
- Great Lakes Shipping Companies Navigate Market Challenges Ahead page: 18
- Waterways Council, Inc.’s 2020 Vision page: 20
- COVID-19 & the US Workboat Market: Business Continuity, Not Business as Usual page: 22
- MarAd Insights: “In peace and war” -- Even Against a Virus page: 24
- Market in Focus: Containershipping page: 38
- Market in Focus: Gas Ships page: 40
- Market Insights: Cruise Shipping ... Now What? page: 42
- The Emerging U.S. Offshore Wind Industry in a Post-COVID-19 World page: 46
- Future Propulsion & Setting the Course to Low-Carbon Shipping page: 48
- Ransomware: The Shipowner's IT Danger on the Horizon page: 53