zoom LPG shipping earnings are forecast to remain buoyant on the back of low oil prices and the absence of fuel substitution, according to Drewry’s LPG Forecaster.Low oil prices have not triggered the substitution of LPG as the fuel of industrial use, as feared by some analysts. As a result, LPG shipping demand has remained intact and low bunker prices have supported vessel earnings.Drewry expects this trend to continue, as 60% of global consumption is residential whose demand is largely inelastic to oil price change. The remainder is largely consumed by petrochemical production and Drewry estimates that only 20% of the sector’s capacity is capable of switching away from LPG fuel. Historically, LPG consumption has proven remarkably stable in spite of oil price volatility.Meanwhile, the fall in oil prices has lowered shipping’s fuel costs which have fed through into time charter equivalent (TCE) earnings despite weakening freight rates. For example, Drewry estimates that lower fourth quarter bunker costs contributed an 11% boost to LPG TCE earnings for very large gas carriers (VLGCs) on the Arabian Gulf-Japan route compared to the previous quarter. Over this period average freight rates fell 26% to $85 per tonne.A similar trend has been witnessed on coastal trades, with North West Europe-East Europe TCE earnings rising 22% over the same period despite lower freight rates.“The implication is that LPG shipping has everything to gain from lower oil prices, despite unfounded fears that this may reduce cargo demand and so damage sector earnings,” said Shresth Sharma, Senior Gas Shipping Analyst at Drewry. “While we do not anticipate VLGC freight rates reaching the highs of last year given the large number of vessels lined up for delivery, we expect bunker costs to remain low through 2015 which will help support LPG shipping earnings.”
Share this:Click to share on Twitter (Opens in new window)Click to share on Facebook (Opens in new window)RelatedGDF member assaulted, robbed of valuables in Kuru-KururuAugust 27, 2018In “Crime”Residents call for Police patrols over heightened crime in Kuru-KururuAugust 22, 2018In “Crime”Teen found floating in Kuru Kururu trench; was last seen with LoverJanuary 14, 2014In “Crime” A labourer of Kuru Kururu, Linden/Soesdyke Highway took his own life on Tuesday afternoon after he attacked and chopped his reputed wife about her body at Swan Village, Linden/Soesdyke Highway.Injured: Malicia AndrewsThe now dead man has been identified as 39-year-old, Ian English of Lot 11 Kuru Kururu Squatting Area.His body was discovered sometime around 16:00h.INews understands that English and his reputed wife, 32-year-old, Malicia Andrews, a mother of six, have been experiencing domestic problems.Charmalita Adams, the youngest sister of the now injured woman, related that Andrews visited her mother’s home to discuss some problems that she was facing in her relationship.“She went down by mommy, cause we ain’t know if they get problems, she never used to speak out … he follow she down there and tell she come with he, but she didn’t want to ‘cause she ain’t want he no more….,” the sister stated.The suspect, however, followed Andrews to her mother’s home at Lot 22 Swan Community, and demanded that she return home with him, but she refused while informing him that she wanted to end the relationship.The suspect reportedly became enraged, armed himself with a cutlass, went into the house and dealt Andrews several chops to her body. The injured woman reportedly ran into the yard and collapsed.He later chopped a piece of rope which he took with him in some bushes. He was later discovered handing from a tree by Police ranks who were summoned to the scene after the chopping incident.His body was cut down and taken to the Lyken Funeral home to await an autopsy.Andrews was picked up and rushed to the Georgetown Public Hospital Corporation (GPHC) where he has since been admitted in a critical condition.The couple, who shared a relationship for several years, had two children ages 13 and 2.Investigations are in progress.