VLGC – Significant Increase in Net Fleet Growth Putting Pressure on Earnings
Feb. 24, 2023
On a global basis, our proprietary calculations of ton-mile demand reveal another strong year of growth for global LPG transport demand to 657 billion ton-miles for 2022, a 5.3% year-on-year increase after a 12.1% jump just a year ago (Figure 1). Ton-mile demand originating from the US Gulf region has been the primary contributor to VLGC demand over the last few years, although our models point to a more modest growth after 2024. The Middle East is also expected to add LPG length till 2027 although exports are likely to head to the Indian subcontinent instead of the ...
Regulatory Update Part 2: EEXI/EEDI Analysis
Feb. 17, 2023
EEXI/EEDI (Energy Efficiency Existing/NB Ship Index) was included in the MARPOL Annex VI 2020 revision and formally adopted in June 2021. It requires ships to reduce greenhouse gas emissions by combining technical and operational methods. Technically it’s measured as grams of CO2 emitted per capacity (dwt) tom-mile under reference conditions for each vessel class.
From January 1, 2023 it is mandatory for all ships to calculate their Energy Efficiency Existing Ship Index (EEXI). As mentioned previously for the CII at this point it’s a fact-finding mission. Shipowners are tasked with data collection of their fleet’s ...
Regulatory Update Part I: CII Analysis
Feb. 10, 2023
Since 2019, ships of 5,000 GT and above have been reporting their fuel consumption data mandated by the IMO DCS. From 2023, cargo, cruise, and RoPax ships must calculate CII (Carbon Intensity Indicator) with a required rating of C or better. A verified Ship Operational Carbon Intensity Plan, or SEEMP Part III, is to be kept on board from 1 January 2023 to document how shipowners plan to achieve their CII targets.
CII is the CO2 emitted per capacity transport work during a calendar year, adjusted by correction factors (to be finalized at MEPC 78 in June 2023) that ...
Breakeven Tanker Asset Analysis – What makes sense to buy?
Feb. 3, 2023
The disconnect between prevailing time charter rates and asset prices remains wide, as asset values continue to find support from inflationary pressures, healthy earnings momentum, and tight shipyard capacity, which in-turn have dissuaded owners from divesting out of existing tonnage as replacement costs are high. We are beginning to see a divergence in the relative value achieved from operation in mid-sized tankers compared to larger tonnage in response to shifting trade patterns.
To assess the disparity between charterers and owners’ positions, we evaluated estimated break-even time charter equivalent earnings over a 5-year investment period using today’s asset prices (Table ...