Fleet growth to cap rates

Epic Gas expects freight rates to remain relatively flat through 2015 due to the size of the newbuilding order book.

“While political disruptions in the Black Sea and decreased petrochemical activity in and around China played a role in the weaker cargo market during the second half of 2014, vessel supply also played its part in dragging down fleet utilization,” Epic said.

At the end of 2014 the pressurised LPG carrier orderbook stood at 45 vessels with an aggregate capacity of 297,600-cbm, or 15\% of the fleet by vessel count and 21\% by capacity.

Epic accounted for eleven of the vessels on order, representing 31\% of the orderbook by capacity, and 43\% of the capacity in the vessel segments above 7,000cbm.

In addition brokers estimate that China‐flagged vessels with an aggregate capacity of between 75,000-cbm and 100,000-cbm have entered international trades during the year.

Within the orderbook, Epic says 2015 represents the heaviest delivery year with 29 ships scheduled to deliver, of which 18 vessels are 5,000cbm or below.

In 2014 shipyards delivered 22 vessels with an aggregate capacity of about 106,900-cbm and an average size of about 4,859-cbm.

However, Epic said due to this environment the market has seen the first meaningful amount of scrapping of pressurised vessels

During 2014, six pressurised ships totalling 23,500-cbm, or just under 2\% of the global fleet, were sent for demolition.

“While these deliveries have been and will likely be partially offset by scrapping of older tonnage, the Company expects the additional supply to keep a lid on rates throughout 2015, especially in the smaller vessel sizes and within Asia,” it said.

source:www.tradewindsnews.com