Study on Ammonia and LPG shipping market

Background

• With the ongoing decarbonisation drive in the shipping industry, the client was seeking to better understand the latest trends and trade flows across LPG and Ammonia markets and to support the management in their business decisions related to these particular shipping markets (LPG and Ammonia).

Client Objectives

• To provide an outlook for LPG and Ammonia markets in the next ten years, including the development of demand from different sectors and analysis of the impact on the supply of the vessel.

• To identify the optimal vessel size for future LPG and Ammonia vessels with developments in receiving terminal capacities and the restrictions on the vessel sizes.

Drewry Approach

• This study was entirely based on secondary market research. Given the distinct market behaviours of the LPG and Ammonia sectors, we have conducted the analysis using slightly different approaches for each sector.

• For the LPG sector, the approach followed by the Drewry team included use of:

  • A trade matrix to identify major exporting and importing countries/regions, further, we have identified the ports and terminals that are handling LPG vessels. Besides, we have also looked at the expansion plans for both the port/terminal side and the PDH plants front. Last but not least, future LPG/ammonia vessel designs are also identified with the Approval In Principle (AIP) announcement.

  • With the data collected from step one, the team identified the main vessel sizes on top trading lines, and identified the possible expansion of port capabilities in future.

     

• Further optimal vessel sizes was also assessed with consideration given to future demands and terminal restrictions.

Results Achieved

• Drewry presented a comprehensive report outlining the demand and supply dynamics of both the LPG and Ammonia shipping sectors. Additionally, Drewry identified the optimal vessel sizes required to meet the future demand in both sectors. Subsequently the client invested in very large ammonia carriers.