LPG carriers see hire rates rise

23 August 2004 00:01  [Source: ICB]

Shipping consultant Drewry reported small LPG (liquid petroleum gas) carriers have enjoyed a good start to 2004, with spot or one-off hire rates for LPG cargoes in Europe rising to their highest level since 1995.

This follows several years of decline and uncertainty since 2000, said Andrew Buckland at Drewry shipping consultants: ‘It’s fantastic for ship owners to now see that 2004 is a year of stable recovery and sustained growth.’

Small LPG carriers transport chemicals, such as ethylene, propylene and butadiene, as gases rather than liquids, Buckland said.

The main reason for the upturn is that the supply of ships has started to decrease, Buckland explained. ‘There haven’t been many new ships added to the fleet recently and several older ships have been scrapped, so the number of vessels is at best staying the same but actually falling slightly,’ he added. This decline in new ship orders reflects the poor market for petrochemicals over the past few years, though Drewry forecasts this will increase, with the greatest demand from the US and China.

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