Asia and South America Lead LNG Demand Growth
According to the ship owner, “global LNG supply was approximately 96 mt in the second quarter of 2021, growing by 8 mt (or 9%) year-over-year, according to Poten. Supply growth in the second quarter was particularly strong in the United States (“U.S.”) which increased production by 7 mt (or 61%) year-over-year, due to higher utilization from existing liquefaction trains as well as the ramp-up of production at the third trains at Freeport LNG, Cameron LNG and Corpus Christi LNG. The resumption of LNG exports from Egypt helped grow supply from the Middle East by approximately 2 mt (or 32%) while increased utilization of existing facilities saw Russian LNG production grow by approximately 1 mt (or 17%). Growth from these three regions offset declines from Trinidad and Norway. Looking ahead, approximately 125 mt of new LNG capacity is currently under construction and scheduled to come online between 2021 and 2026”.
“Headline spot rates for TFDE LNG carriers, as reported by Clarksons, averaged $58,000 per day in the second quarter of 2021, a 61% increase over the $36,000 per day average in the second quarter of 2020. Headline spot rates for Steam vessels averaged $45,000 per day in the second quarter of 2021, 96% higher than the average of $23,000 per day in the second quarter of 2020. Headline spot rates in the second quarter benefited from LNG demand growth from Asia combined with LNG supply growth in the US as detailed above”, GasLog added.
According to GasLog, “as of July 23, 2021, Clarksons assessed headline spot rates for TFDE and Steam LNG carriers at $56,000 per day and $39,000 per day, respectively. Forward assessments for LNG carrier spot rates indicate rising spot rates through the remainder of the year. However, the magnitude and pace of any sustained upward movement in spot rates will depend on both the continued recovery of LNG demand and LNG price differentials between the major export and import regions, whilst the forecasted growth of the global LNG carrier fleet combined with any slow-down in demand could create volatility in the spot and short-term markets over the near and medium-term. As of July 23, 2021, Poten estimated that the orderbook totaled 126 dedicated LNG carriers (>100,000 cbm), representing 19% of the on-the-water fleet. Of these, 106 vessels (or 84%) have multi-year charters. 31 orders have been placed for newbuild LNG carriers in 2021 as of July 23, 2021 compared with 34 for all of 2020”, the shipowner’s analysis concldued.
Nikos Roussanoglou, Hellenic Shipping News Worldwide