Could you elaborate on the competitive advantages/disadvantages of the Handysize segment? If they are the most versatile, why is the orderbook for that segment the lowest?
Handysize LPG carriers can carry ethylene, petrochemicals, LPG, and ammonia on short—to medium-haul routes. Yet this is not enough to make them an attractive proposition.
The decisive factor is geopolitics. Global bifurcation means the supply and demand for petrochemicals and petrol products like LPG will reshuffle. Another factor is the growth in oil production in the West of Suez and the growth in oil demand in the East of Suez. This means ammonia, LPG, and ethylene buyers will seek not only the best price but to trade with allied nations. Those factors combined result in rising tonne-mile demand for short and mid-haul routes.
I believe ship owners and investors largely ignore the role of geopolitics, assuming the future is the same as the past. Therefore, only VLGC and MGC are needed because globalization will last, and the Middle East and Russia will supply the world with fossil fuels and petrol products. Meanwhile, assuming no one will need small/handy carriers.
We are not in Kansas anymore. Short and medium-hauls will matter a lot in the coming years, especially for specialized ships like LPG.
In summary, my Handysize LPG carriers call is based on geopolitical shifts that will affect the LPG freight market.
Could you elaborate on the competitive advantages/disadvantages of the Handysize segment? If they are the most versatile, why is the orderbook for that segment the lowest?
Thanks for your question.
Handysize LPG carriers can carry ethylene, petrochemicals, LPG, and ammonia on short—to medium-haul routes. Yet this is not enough to make them an attractive proposition.
The decisive factor is geopolitics. Global bifurcation means the supply and demand for petrochemicals and petrol products like LPG will reshuffle. Another factor is the growth in oil production in the West of Suez and the growth in oil demand in the East of Suez. This means ammonia, LPG, and ethylene buyers will seek not only the best price but to trade with allied nations. Those factors combined result in rising tonne-mile demand for short and mid-haul routes.
I believe ship owners and investors largely ignore the role of geopolitics, assuming the future is the same as the past. Therefore, only VLGC and MGC are needed because globalization will last, and the Middle East and Russia will supply the world with fossil fuels and petrol products. Meanwhile, assuming no one will need small/handy carriers.
We are not in Kansas anymore. Short and medium-hauls will matter a lot in the coming years, especially for specialized ships like LPG.
In summary, my Handysize LPG carriers call is based on geopolitical shifts that will affect the LPG freight market.
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