Shipping industry nowadays more
than ever before comply to international regulations. That has a result an
increase to some of the fixed costs of the vessels operation, which leads to a
decrease in the income of a shipping firm. That led firms to find ways to
decrease operational costs, turn to technological “assistance” for help and
alter their chartering policies. Big part of the shipping industry is the LNG
fleet, which its nature (inelastic, fewer buyers) under the above circumstances
make it even more difficult to be as profitable as before.
So, since the LNG fleet continues
to have profit and expand its number of vessels that means the supply and
demand in LNG market is worth investigating and describing the effects of the
supply and demand on that specific and rising market (Tirelli, 2012). Given the
fact, that the supply and demand will be analyzed in the last decade and that the
appropriate data exist in Clarkson’s data base the topic is feasible.
Lng market rises as the upcoming big
market and that is mostly due to the growth of Asia and the need of those countries
for gas. According to BP in the next four years the total LNG trade will be increased
by 30% worldwide including Asia, Australia and USA (bp.com, 2017).
By examining the course of the demand
and supply of the LNG market over the pas years we can make also assumptions about
the future of that specific market something that would lead to very interesting
Natural gas involves about a quarter
of global energy demand, of which 9.8% is supplied as LNG. Although LNG supply
previously grew faster than any other natural gas supply source at a percentage
of 6.2% from 2000 to 2015, its share since 2010 remain steady. In recent years the
market has remained as it was without major changes, but the rising of LNG supply
will increase according to international firms and will exceed the demand (Son
and Lee, 2017).
The research problem is to investigate how supply
and demand affect the LNG market, which variables a