Will there be an LNG Shipping oversupply in 2024? Report

Insight 05 December 2023

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Report summary

The LNG market could be oversupplied with shipping capacity in 2024. More LNG carriers than ever are expected to be delivered into the fleet next year. There is limited, organic LNG supply growth forecasted, with risk attached to several project start-ups. And, thanks to strong spot LNG demand in Europe, tonne-mile demand for LNG carriers is generally soft. On the face of it, the supply of LNG ships will outpace demand for them, putting downward pressure on spot charter rates. But we predict a more nuanced reality. Several factors will impact LNG shipping demand in a big way next year. Will lacklustre Asian spot LNG demand result in low shipping utilization? Or will the fleet be kept busy with increasing operational adjustments and trading? In this insight, we present the upside and downside risks to an oversupplied LNG shipping market in 2024.

Executive Summary
A record number of ships will be delivered, driving the risk of oversupply
- 60 standard LNG carriers will be delivered to the fleet next year
- Timing of supply additions will be critical
Market dynamics are increasing LNG shipping demand
- Panama Canal utilizationhas fallen: will it return as cross-basin trade ramps up?
- Value creation through trading and optimisation is rising
Will the market receive more shipping capacity than is needed?