Newbuild prices for large LNG carriers are drifting lower. According to Clarksons Research, the average price for a 174,000-cubic-meter LNG carrier fell from $248 million in January to $245 million in October. The decline is modest, but the direction worries Korean shipbuilders, for whom LNG carriers are the flagship high-margin segment.
Between January and October this year, 76 large LNG carriers of 174,000 cubic meters or above were ordered worldwide. Korea won 44 ships, or 57.9%, while China took 32, or 42.1%. Total orders roughly doubled year on year, but momentum slowed sharply in the second half: 59 ships were ordered in the first half, versus just 17 through October in the second half.
Price pressure comes from capacity expansion and new entrants in China. With Dalian-based Hengli Heavy Industry joining, six Chinese yards can now build large LNG carriers, up from the previous leaders Hudong-Zhonghua and Jiangnan Shipyard. Samsung Heavy Industries acknowledged at its third-quarter earnings briefing in late October that it had recently taken LNG carrier orders at low prices. Two 174,000-cubic-meter ships ordered in December last year were priced at about $251.4 million each; two ordered on October 2 this year came in at about $247.2 million each.
Freight rates are also falling. As of early this month, rates for 174,000-cubic-meter LNG carriers were down about 23% on the Atlantic route and about 40% on the Pacific route compared with the start of the year. For cargo owners moving goods from the US to China, LNG carrier rates are a different market from container ships, but the ordering pace affects new vessel deliveries and capacity supply in the coming years.
The bullish camp is pinning hopes on North American liquefaction projects. French firm GTT, which owns the core LNG cargo tank technology, is seen as a market bellwether through its design contracts. GTT said global liquefaction projects that reached final investment decisions from last year through the third quarter of this year have combined capacity of 135 million tonnes per annum, and most of the LNG carriers needed for these projects have not yet been ordered. Industry estimates put the requirement at around 200 ships. Commonwealth LNG in Louisiana, Delfin LNG in the Gulf of Mexico, and LNG Canada Phase 2 in British Columbia are the main swing factors. GTT expects related orders to start landing from 2026, with vessels needed for 2030 service to be ordered from next year.
In the near term, newbuild LNG carrier prices face further downward pressure as Chinese yards sharpen their pricing competitiveness. The medium-term picture depends on whether North American projects proceed on schedule. For cross-border logistics companies watching capacity costs, this is more of a background variable; what really moves ocean parcel and ocean truck rates is the supply-demand balance of the container fleet.