Asian Viewpoint: by Huo Zhihui

Even though the global shipping market is in a downward trend, very large gas carriers (VLGCs), vessels that transport liquefied petroleum gas (LPG), are seen as performing well. According to statistics from the China Shipbuilding Industry Research Center, a total of 35 new VLGCs were launched in 2015 with another 48 vessels expected in 2016. Both figures are higher than the previous record of 27 vessels entering the market.

Despite falling freight rates for LPG caused by a drop in crude prices and slackening demand, more new-builds are entering the market. In 2015, a total of 86 new LPG vessels were launched with a combined capacity of 3.70 mil cubic meters. These include the 35 VLGCs mentioned above that carry a combined capacity of 2.90 mil cubic meters. In 2016, a total of 124 new LPG vessels with a combined capacity of 5.40 mil cubic meters are expected to enter the market, of which 48 account for 4.00 mil cubic meters. In 2017, a total of 24 new VLGCs with a combined capacity of 2.00 mil cubic meters will be launched.

China has become the second largest LPG importing country in the world with imports in 2015 breaking the 10.00 mil metric ton (mt) mark, a record high for the country. According to statistics from Chinese customs, LPG imports for the period of Jan-Aug 2016 reached 10.47 mil mt, up 40.4% from the corresponding period in 2015. For full-year 2016, LPG imports are expected to increase to 14.00-15.00 mil mt. One of the factors driving the LPG shipping market is strong demand for LPG in China.