Shrinking lifeline for steam LNGCs — Are TFDE/DFDE carriers next?

Source: Drewry Maritime Research

As of February 2026, over 60 LNGCs are idled/laid-up, of which steam carriers account for 70% of the total. Some owners are placing their ships in lay-up, hoping that the vast liquefaction capacity expected towards 2028-29 will generate demand, whereas charters will likely become more reluctant to deploy steam carriers, as this will incur substantial costs. Meanwhile, an influx of modern carriers is underway. 

Although we expect the market to rebalance in 2026 as supply-demand fundamentals improve, demand for steam carriers will remain low, leading to another year of record-breaking demolitions. Meanwhile, even after laying up the ships for three to four years (with laid-up costs depending on their condition), vessels might only get a short burst of employment, leaving vessel owners to bear the cost. 

* 2026 is an estimation based on our forecast for steam carriers.

Note: Ship operating cost is considered from Drewry's Ship Operating Costs 2025 Annual report.

Source: Drewry Maritime Research

As charter rates are falling and operating costs are rising (though steadily), the ratio between the two has been widening since 2025; we expect the same trend to continue in the coming year, challenging the economic viability of these carriers. No savings appear plausible for these carriers under normal market conditions, leaving several steam carriers stranded as a result of a dismal demand outlook. 

Higher demolitions to create demand for over 80 new LNGCs by 2030

We anticipate an average 18-20 carriers to be demolished each year through 2030 (with scrapping peaking in 2028-29), which will necessitate demand for new LNGCs. According to our estimates, about 80 LNGCs will be required to balance replacement tonnage through 2026-30. 

Note: Estimation for vessel demand only considers expected demolitions per year (though some could end up for conversions).
Source: Drewry Maritime Research

LNG fleet at risk

Note: Risk category as per market conditions, charter rates, OPEX cost, charter duration, and environmental and economic feasibility, and regulatory conditioning.
Source: Drewry Maritime Research

Will TFDE/DFDE carriers be next in line?

As maritime regulations become more stringent and non-compliance increasingly challenging, we expect TFDE/DFDE carriers to bear the brunt in the long run, especially if technological reforms fail to address existing inefficiencies and push them to scrapyards.   

Demolitions of these carriers will hinge on multiple factors, including: 1) stricter regulations on methane slip, undermining the feasibility of these carriers, 2) technological breakthroughs failing to keep pace with regulations, 3) the number of LNGCs available by 2030, 4) the cost differential between opex and charter rates, and 5) market conditions amid growing geopolitical uncertainty. 

About 20% of the current TFDE/DFDE LNG fleet will be at risk as regulations become stricter over time, affecting the commercial viability of these vessels. However, as Asia will be the main growth hub for LNG trade, we can expect more of these vessels to find employment there. Nevertheless, they will steadily lose their economic and environmental viability, ultimately being relegated to the scrapyards. While demolitions will be gradual, the phasing out will necessitate a greater demand for more efficient carriers—a journey seen for steam carriers will be followed by TFDE/DFDE carriers. 

Source: Drewry Maritime Research

More LNGCs will be required by 2035

Drewry projects that over 550-600 LNGCs will be required by 2035, driven by project-linked vessel demand and replacement tonnage from demolitions. We expect new orders to rebound in 2026 and 2027, primarily to meet the demand from upcoming LNG projects. However, as demolitions accelerate, the demand for replacement tonnage will follow suit, boosting the demand for new carriers.