Newbuild LNG carrier deliveries to hold quick in 2Q

Newbuild LNG carrier deliveries are set to hold quick in the second quarter of this year, with 17 new vessels set to join the global fleet over the period.

Almost all of the planned fleet additions are larger carriers, with capacities of 173,400-180,000m³ and two-stroke propulsion. Only one carrier — being built at China's Jiangnan shipyard for Chinese firm Jovo — falls out of this size range, with a capacity of 79,800m³, allowing it access to the country's arterial waterways.

The addition of 17 carriers in the second quarter would be a significant rise on the nine deliveries made over the same period a year earlier.

Three carriers have already been delivered so far this quarter, with Greece's Latsco and Japanese owner NYK Line each picking up a single vessel earlier this month and Danish investment firm Navigare Capital receiving its 174,000m³ Marvel Swan carrier in the past few days, which will sail under charter with Japanese firm Mitsui.

The number of scheduled deliveries is also supported by some carriers being delayed from delivery in the first quarter of this year. In January-March, 17 carriers were delivered, down from the 20 initially expected, but again a sharp rise from the four delivered in the first quarter of 2020.

But the pace of newbuild carrier additions to the global fleet is set to slow again in the second half of this year, although it remains slightly quicker than in July-December 2020. In the third quarter, 12 new carriers are expected and 11 in the following quarter, down from 10 and nine in the same periods a year earlier, respectively.

Expectations for quick newbuild deliveries throughout 2021, with additions set to slow next year, in recent months have weighed on forward spot charter rates covering fixtures for this summer. And global liquefaction capacity growth is also expected to slow in 2021 from sizeable additions in recent years — particularly the US, which has a greater shipping distance to its primary markets than most other export regions. These capacity additions have acted as a key structural support to tonnage demand in recent years, with inter-basin des price differentials — barring the past winter — often too tight to support longer inter-basin voyages that would have driven tonnage demand higher.

By Samuel Good