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Positive outlook for energy shipping, says Clarkson

Photo: John Foreman LNG carrier in Johor Strait near MMHE
LNG carrier in Johor Strait near MMHE
The tanker market has ticked up significantly from 30-year lows last year, according to latest data from Clarkson Research.

In a summary of analysis due to be released soon in the analyst’s twice-yearly Shipping Review & Outlook, Clarkson Research managing director Stephen Gordon identifies firm trends in products tanker trade and positive developments in tonne-mile tanker demand generally. The upturn follows a spell of 30-year lows last year and comes against the backdrop of continuing conflict in Ukraine and a small orderbook.

In light of a strong focus on energy security, Clarkson is projecting a 65% increase in LNG shipments over the decade, with trade volume expected to reach 630m tonnes by 2030, up from 380m tonnes last year. With specialist LNG builders mostly full for the next several years, rates are likely to remain strong, having risen to ‘multi-year highs’ recently.

Meanwhile, although the LPG sector will have to absorb a significant volume of new tonnage in 2023, rates remain healthy. Offshore oil and gas markets have made positive progress and the offshore wind sector is growing rapidly, Gordon wrote.

More broadly, for shipping, the war in Ukraine, rising inflation and economic trends in China have generated uncertainties over the global economic outlook. Clarkson projects GDP growth of 2-3% annually this year and next, down by about 1.5% on pre-conflict expectations.

Seaborne trade volumes have been downgraded therefore, with volumes in tonnes now expected to rise by 0.9% this year, down from a forecast of 3.5% at the start of the year. However, the conflict in Ukraine is changing trade patterns, creating additional tonne-mile demand. Together with other ‘inefficiencies’ such as port congestion, this is partly offsetting the downgrade in trade volumes.   

The analyst’s cross sector ship earnings index, ClarkSea, has eased slightly this month but is still at $38,881 per day for the year so far. This is a 146% increase on the ten-year trend and higher than at any time since 2008.