French orders to foreign shipyards

70
LPG
freight rates
(spot voyages)
VLGC and
2,500-5,000 cbm
80
70
60
50
40
30
20
10
0
US$/tonne
The large reshuffling of commercial management, which
recently took place, is one of the direct consequences of
such weak market conditions, generating owners'
efforts to limit the pressure on freight.
A general lack of molecules has affected VCM movements
from the US Gulf where exports were mainly covered
through long-term contractual agreements. It was the
same for propylene and ethylene global availability,
which generated a shortage in Europe, supported by
plants maintenance "outage".
Ships of 15,000-20,000 cbm capacity hardly obtained
a monthly time-charter equivalent below $400,000.
The smaller size could not achieve much more than an
average level of $325,000.
Those numbers might seem a little too short for anyone
who wants to run a ship at break-even point. But we
should always remember that the shipping market is
such that, besides long-term contracting for some captive
trade, owners are often there for "less loss employment",
while charterers "are permanently searching for cheapest
opportunities"!
The production and consumption of petrochemical
commodities are however picking up in South East Asia
and the Far East with positive signs gradually coming up
for next year.
Four or five 22,000 cbm newbuildings (ethylene capacity)
are scheduled to be delivered in 2000, and so far to be
operated outside of larger marketing groups. It will be
interesting to see how and on which type of gas trade
these units will find their way.
LPG freight rates (spot voyages)
VLGC and 2,500-5,000 cbm
VLGC MEG/Japan
Small vessels 2,500-5,000 cbm
European coasting
Jan 94 Jan 95 Jan 96 Jan 97 Jan 98 Jan 99
• 3,000 to 8,000 cbm gas carriers
Many more players all over the world are involved in this
segment size where ships are balanced between LPG and
chemical gas employment. They are mostly pressure- type
for LPG whilst semi-pressure/refrigerated type of tonnage
is dedicated to chemical gases as well as LPG.
The market used to be regional or intra-continental due to the
small size of parcel transportation, although limited in volume.
We now see some inter-continental movements, mainly in the
petrochemical sector for Transatlantic, Middle East to East and
West, South East Asia and Far East to western options.
Although the winter months turned out to be fairly active,
no permanent impact could be registered on the freight
market and the balance of the year was rather dull and
disappointing, until some reverse trend appeared by
November/December.
Whether on spot or period employment, most of those
units have obtained levels very near to operating costs,
leaving straight loss or very small margin if any to the
shipowner who had to sweat heavily to avoid idle time.
Monthly time-charter rate levels were pushed down to
$125,000 for the smaller pressure ships and up to $200,000
for the larger semi-refrigerated type ships. These levels did
not even create more demand for time-charter coverage
as the spot availability allowed charterers to stay relax and
pick up the ship whenever required.
At the end of the year, the situation has reversed and a
firmer trend seems to be on its way with better prospects
coming from all areas on the petrochemical and LPG
fronts for the months ahead.