Page 142 - ΝΑΥΤΙΚΑ ΧΡΟΝΙΚΑ - MARTIOS 2023

FREIGHT MARKETS

FID, as mentioned above. The above ele- long term is the pressure that environ-
ments combined point to a term charter mental regulations will apply to market
market that is not set to weaken but only participants for fleet renewal and mod-
strengthen going forward. ernisation. Currently, older-generation
One possible headwind quoted by some Steam Turbine vessels make up roughly
market participants is the impact of the 35% of the existing LNG conventional
extensive demand destruction, which carrier fleet, while TFDE vessels make
occurred mainly in Asian importing up 26%. Firstly, the EEXI, and toward the
nations due to high LNG prices over end of the decade, more heavily, the CII,
the last 18 months. However, the real will start impacting the trade of most of
impact of this demand destruction is these vessels and will therefore lead to
yet to become fully transparent since fresh orders to replace older tonnage,
it has been difficult to discern to what which will be forced to the market’s side-
extent the muted Asian demand for LNG lines. By the end of the decade, more
this winter was owed to a mild winter than 300 vessels will be over 20yrs of
versus the possible mid-term demand age, with almost a quarter of them being
destruction itself. The counterargu- more than 30yrs of age and, therefore,
ment to this narrative is that the record will have to be replaced by modern LNG
amount of production coming on stream carriers with a friendlier environmental
in the next few years will lead to a nor- footprint. These carriers, however, come
malisation of LNG prices which will with a price tag of $250mil+, and any
once more stimulate its growth in the new orders will not be delivered earlier
energy mix of Asian countries. After all, than 2027.
Asia is expected to drive 70% of energy 2023 - a year in which less than 10
demand growth over the next 20 years, vessels remain under the control of
and the US will be a major source of the independent owners and thus open for
natural gas that will eventually come to term business - will undoubtedly see
meet these increased needs. Reflective exciting developments in the market
of this outlook is the great number of in the coming months. Other things to
Sale and Purchase agreements signed look out for are the long-awaited Final
by Asian buyers with US projects over Investment Decisions for a handful of
the last 12 months, especially after the US projects, the ongoing deliberations
war. The new volumes under these con- of market stakeholders on the CII reg-
tracts are likely to travel long distances ulation and its implementation rollout,
into the Pacific basin, leading to longer and the possible return of Chinese LNG
tonne-miles and higher fleet utilisation buyers as China hopefully gains momen-
in the long term. tum and returns to pre-Covid levels of
Another bullish element over the mid- industrial and commercial activity.

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