Global LNG markets are poised for growth, with demand continuing to rise and Greek ownership expanding. According to a recent report by maritime consultancy Veson Nautical, VesselsValue, Greek shipowners invested approximately $13.8 billion in 59 newly built LNG vessels in 2021. Additionally, Greek owners have invested around $18 billion in new gas vessels, diversifying their fleets beyond traditional tanker, bulker, and container asset classes to include LNG and gas. The Veson Nautical report has identified a $4 billion investment in 41 LPG vessels, one of the most undervalued shipping classes in the world. LPG is still one of the main fuel drivers in the developing world. Since Greek owners have also invested $12.2 billion in 167 tanker vessels, $4.1 billion in 109 bulkers, and $3.1 billion in 39 containerships, the end of the “Onasis” Greek rule of shipping is far from over. As Dan Nash, director at Vessels Value, stated, “Greek shipowners have taken bold investment stances that could shape the future of global trade”. He also indicated that Greek shipowners see a major opportunity coming.
The report states that Piraeus-based Capital Ship Management is the largest investor at present, with a bet on 15 large LNG vessels, two very large ammonia carriers (VLAC), eight medium gas carriers (MGC), and four carbon dioxide (CO2) vessels for a combined spend of about $4.7 billion. Second place is Athens-based Maran Gas Maritime, spending around $3.3 billion, including 15 large LNG carriers. Third place is held by Athens-based Evalend Shipping, spending $3 billion on 12 very large gas carriers (VLGC), two MGCs, two VLACs, and six large LNG vessels.
VesselsValue also reports that new-build prices have reached their highest level since the 2008 financial crisis, with the most recent upward pressure starting in 2021. Due to the boom in orders, global shipyard capacity and construction periods are under major pressure.
At the same time, in its Q4 2024 forecast, VesselsValue reports that there is a mixed outlook across different vessel types until 2027. The consultancy indicates an upsurge globally in orders for Bulkers and Tankers to be expected, while demand for Containers and LNG/LPG vessels will decline. Geopolitical risks, such as the Houthi attacks in the Red Sea and Bab Al Mandeb Strait, are seen not only as risks but also as an opportunity overall for shipping. Increased geopolitical risks, especially in Middle East-North Africa, offer an upside potential. There are still some clouds on the horizon, such as the diffuse Chinese economy recovery, which is a major factor in international (maritime) trade, and still high interest rates in the OECD countries.
As tanker ordering activity continues at a relatively strong pace in 2024, some constraints are building up. VesselsValue stated that the delivery schedule for 2024 is low, but is expected to gain pace in 2025 and onwards. The total Tanker order book to fleet ratio, currently at 12%, has increased through 2023 and 2024.
Overall, current global market fundamentals, rerouting of maritime trade, and increased geopolitical instability don’t seem to be having a negative impact on maritime trade or investments. As seen by already major investment plans in ports and shipyards, especially by Arab parties, such as AD Ports and DP World, but also Saudi Arabia’s plans, the future looks bright. If new regions are also going to invest in shipyard capacity, especially UAE-Saudi Arabia, Egypt, or even North Sea littoral states, some of the building time pressure can be relieved. Extra competition is not only needed to thwart part of the almost cartel positions of Asian parties but also to increase availability for supply chain projects in energy and industry worldwide.
By Cyril Widdershoven for Oilprice.com