Throughout most of the SIMON SAYs blogs produced so far I’ve concentrated on the refrigerated LPG market, transported mainly on very large gas carriers (VLGCs), between continents and across large spans of water, to get the supplies to their end destination. Of the approximately 105 million Mt of LPG shipped by sea, the movements by VLGC account for about 70-75 per cent of this trade, but what are the reasons for the other quarter of seaborne volumes being moved by other modes of transport, and what are the striking differences.
So, we are getting even closer to the implementation of IMO 2020’s Sulphur cap, I bet you’re all prepared and excited to see what happens next, I certainly am! I think ship owners have made their minds up about both the short-term switches they have to make, as well as fueling decisions for future new buildings, especially VLGCs. The big question though is what will sit in the middle for those who have basically said they will “suck it and see”. The buzz is certainly dual fuel, and maybe it will also be part of the reality.
At a recent gathering of the good and the mighty in Athens, I understand a distinguished ship owner was able to hold a relatively straight face when explaining the challenges, or something along those lines, faced by the VLGC ship owners in the current mesmerizingly strong LPG shipping market. I’m sure every investor who boarded the run early, maybe even after reading my summer and autumn SIMON SAYS blogs, is sitting extremely comfortably today as he checks his share portfolio. But what happens next, is there going to be a twist, there usually is!
I always remember in my early days in the LPG business being told about this venerable place in London called the Baltic Exchange, set up in 1744 after shipowners and merchants gathered to discuss and transact business over a cup of coffee, at the Virginia and Baltick Coffee House, on Threadneedle Street.
I used to love the logistical side of LPG trading, fascinated by how many different types of cargo an LPG vessel could actually carry. Of course, there are different types and sizes of LPG vessels, from smaller pressurised to semi-refrigerated of different sizes, semi-refrigerated generally bigger than pressure ships, but not as big as fully refrigerated vessels, that go all the way up to Very Large Gas Carriers (VLGCs).