LPG Newbuilding Market Slows

New orders for LPG carriers are currently running at 50% less than seen during the past five years, or 40% in cu m capacity terms. The number of new vessels due to be delivered through 2013 were forecast at 191, according to a new report from Fairplay.

“The LPG market will by this slower fleet growth be better positioned than most other shipping markets when the GDP growth resumes to previous levels, particularly in Asia,” explained Niklas Bengtsson, senior consultant for Fairplay Market Forecast. “China and South Korean dominate the order book for tankers (LPG carriers) over the next five years, holding 30% percent of the orders between them. Europe accounts for only 15%," he added.

The monthly Shipbuilding Market Forecast for February 2010 examines the oil, chemical, LPG and LNG tanker markets. It provides a review of the global business environment demand for seagoing transport, market conditions and capacity utilisation for these vessel types and gives a detailed five-year shipbuilding forecast, including new orders, deliveries and recycling.

The report forecasts that the LPG carrier fleet will increase by just 7% over the next four years. In 2008, the fleet reached historic highs, but, according to Fairplay, the forecast deliveries for 2009 through 2013 will be 5.2 mill cu m, which is a 16% drop from 2008 deliveries.

Removals from the worldwide fleet predicted in the same period is 152 ships, an increase of 70% compared to the previous five-year period, but these will mainly be relatively small ships as the figure is only 40% of the capacity if measured in cu m terms.

At the beginning of January 2010, the worldwide LPG fleet stood at 340 vessels, with a total capacity of 47.7 mill cu m. A further 52 vessels were on order, which was 40 less than at the same time last year, the report said.