European class society DNV shows small rise through November in LNG-fuelled newbuilds as bunker prices drop
European classification society DNV said there were a total of eight new vessels with alternative fuel propulsion ordered in November with four of them LNG-powered ships as the sector showed continued growth, helped by lower LNG bunker prices at under $890 a tonne in markets like Rotterdam to improve the shipping economics outlook.
Among the ships the other four were methanol-powered and all eight shipping were in the roll-on-roll-off (RoRo) ferry and car carrier sectors.
DNV said that so far in 2023, the platform has logged 268 new orders for alternative fuel vessels, including 112 LNG-fuelled and 152 methanol-powered ships.
The months of June and July saw the most activity related to LNG with 47 new orders combined, whereas July propelled methanol-powered vessels across the 200 ships mark with 48 new orders.
Strong market
“While November's performance may not have matched the volume of previous months, the overall enthusiasm and promising trajectory remain for both LNG and methanol,” said Martin Wold, Principal Consultant in DNV's Maritime Advisory business.
“In general, the pipeline for both announced and unannounced projects remains strong, indicating that the pace will pick up again,” Wold explained.
“However, it's worth noting that the momentum we see in the tanker and bulk segments continues to experience a more gradual acceleration,” he added.
There are currently 988 LNG-fuelled vessels on order or in operation worldwide. This list comprises 528 ships to be delivered through 2028 and 460 LNG-powered ships on the water.
About 198 of these newbuild orders are for LNG-powered containerships and a further 139 vessels are Pure Car and Truck Carriers (PCTCs), while oil and chemical tankers are in third with 48 orders and the fourth-highest segment is for crude oil tankers with 36 orders.
There are also 24 cruise ships and 18 tugs in the order book along with 11 RoPax vessels as well as single-figure numbers for car and passenger ferries, general cargo ships, offshore supply ships and fishing vessels.
Rotterdam prices
This DNV data does not include smaller inland vessels and barges that are part, for example, of the Amsterdam, Rotterdam, Antwerp (ARA) refining hub transportation in northwest Europe or trading on major European rivers.
LNG bunkering fuel costs in Rotterdam have declined steadily since the start of the year.
LNG bunkers at Rotterdam were priced in November at the start of December 2023 at $887 per tonne compared $998 at the start of November 2023 and $1,392 per tonne at the start of January.
Among other emissions-reducing fuels, the price of Ultra Low Sulfur Fuel Oil (ULSFO) at the Dutch port was less volatile than LNG.
The last ULSFO quote in Rotterdam showed only a slight rise since the start of the year to $558 per tonne at the beginning of December 2023 compared with $556 per tonne at the start of January 2023.
LNG bunker prices fall from record levels in Rotterdam as orders build continues for LNG-fuelled ships
European maritime classification society DNV said that there was still momentum in orders for LNG-powered vessels from ship owners in the month of September even at a time of very elevated LNG bunker prices in ports such as Rotterdam in the Netherlands.
The DNV report said that at the end of September there were 833 confirmed LNG-powered ships, six more than in August, and 229 additional LNG-ready ships, while LNG bunkering infrastructure was continuing to be developed worldwide.
“According to the latest figures from DNV’s Alternative Fuels Insight (AFI) platform, 14 LNG vessels were added in September. However, contract cancellations limits the net increase to six ships,” explained DNV.
“This last quarter was the slowest on record since the fourth quarter of 2020 with a net increase of 26 ships, which we attribute mainly to reduced newbuild contracting in general,” said the Norway-based class society.
“The total order figure for the year to date has reached 179 with mainly container liners helping to keep the momentum up this month,” stated DNV.
For methanol-fuelled ships the data showed the total at 66 vessels with around 40 percent of the fleet also transporting methanol as cargo.
Containerships lead
The DNV data showed that total number of LNG-powered ships in operation or on order at the end of September 2022 comprised in the largest sectors 211 containerships, 106 car carriers, 89 crude oil tankers and 54 oil-chemical tankers.
There were also 66 bulk carriers using and planning to use LNG, 50 car and passenger ferries, 39 cruise liners, 38 tugs, 37 offshore supply vessels and 33 RoPax ships.
This data does not include smaller inland vessels and barges that are part of the Amsterdam, Rotterdam, Antwerp (ARA) refining hub transportation in northwest Europe.
Analysts note that LNG remained the preferred low-carbon solution despite current gas pricing which is expected to last into the near future.
That’s as LNG priced in fuel oil terms at Rotterdam declined sharply at the start of October to $2,870 a tonne, well down from the previous record of around $4,545 per tonne at the start of September 2022.
Among other emissions-reducing fuels, Ultra Low Sulfur Fuel Oil (ULSFO) at the Dutch port declined during the period and was priced at the start of October at around $915 per tonne compared with $990 per tonne at the start of September.
