What changes are expected in seaborne trade through to 2025 and why?
- Ethane production has reached an all-time high in the US
- The unprecedented production volumes have resulted in large ethane rejection and low ethane prices in the US making it attractive as a feedstock for the production of ethylene via steam cracking.
- As the first wave of new US ethane-based ethylene plants is coming into operation, a second wave appears on the horizon increasing even further the domestic demand.
- Currently ethane is exported from two US terminals: one in the Gulf and one in the North East with potential new terminals under discussion.
Which countries/projects will be the key potential importers in the medium/long-term?
- An ethane cracker is the most efficient ethylene plant to build. US sourced ethane is expected to remain the lowest cost vs naphtha for the production of ethylene in Europe and the Far East.
- US ethane is currently imported into a number of projects in Europe, Latin America and Asia. There have been announcements of future developments particularly in China.
- With a number of potential projects in China, which currently is a large ethylene importer, the startup of new ethane steam crackers could influence petchem gas seaborne trade.
How many new vessels could the market require to satisfy the new seaborne trade demand?
As seaborne trade began to be established from the US, a number of companies invested in a fleet of ethane capable vessels specific to the underlined projects.
With increased voyages expected, particularly from the US to Asia, ton mileage is expected to rise and hence a new ethane fleet is expected to emerge.
Shipping length will depend on Asian projects primarily and vessel size.