Analysis of the Lng Tanker Market Oct 2012 - March 2013
When assessing the situation on the LNG tanker market, there is a need to look at several factors but probably the most important one is the Fukushima disaster in Japan from March 2011. The incident provided for a significant demand from Japan, who has increased its import of LNG to meet the internal demand for energy. Prior to the disaster, the import for 2010 was in the 73 mmt figures, whilst in 2011 the total import was just above 83 mmt (EIA, 2013). The demand is rising, especially because Japan is striving to create a global market for the commodity. China is also increasing its imports due to the expansion of its LNG terminals as well as internal consumption – the import figures for November 2012 have tripled compared to the ones from the previous year (EIA, 2013).
Compared to the rest of the shipping industry, the LNG market has been rather stable – perhaps not as successful as in the years before, but still doing quite good. According to a Lloyd’s List article from October 2012, the LNG market has been doing much better than the other shipping sectors, with only around 5% idle ships. This of course is mainly due to the high demand for energy from Japan, where the same figure was twice as large prior to the Fukushima disaster (Lloyd’s list, 2012c). The situation in the spot and in the time charter markets has been different in the past six months, mainly because usually LNG carriers are chartered for longer periods of time (15-20 years and more) and such long-term commitment is a challenge in today’s insecure economic situation – of course, by October 2012, still around 70% of the ships were tied to a long-term contracts. On the other hand, spot hires are more often driven by different and more temporary factors, such as shortage of material or unusual weather conditions, which require more energy, different trading patterns, prices of gas, maintenance of gas sources, etc. For example, in November 2012, the expected lower winter temperatures in Japan
Compared to the rest of the shipping industry, the LNG market has been rather stable – perhaps not as successful as in the years before, but still doing quite good. According to a Lloyd’s List article from October 2012, the LNG market has been doing much better than the other shipping sectors, with only around 5% idle ships. This of course is mainly due to the high demand for energy from Japan, where the same figure was twice as large prior to the Fukushima disaster (Lloyd’s list, 2012c). The situation in the spot and in the time charter markets has been different in the past six months, mainly because usually LNG carriers are chartered for longer periods of time (15-20 years and more) and such long-term commitment is a challenge in today’s insecure economic situation – of course, by October 2012, still around 70% of the ships were tied to a long-term contracts. On the other hand, spot hires are more often driven by different and more temporary factors, such as shortage of material or unusual weather conditions, which require more energy, different trading patterns, prices of gas, maintenance of gas sources, etc. For example, in November 2012, the expected lower winter temperatures in Japan