LNG carrier market imbalance as fleet outpaces trade growth

Greece-based shipbroker Intermodal reported this week that LNG trade is forecast to grow by 6% in 2025, while tonnage capacity is expected to rise by 9%. This mismatch is weighing on LNG tanker earnings. ICIS senior analyst Alex Froley told Riviera new ships are being delivered faster than new LNG production, putting downward pressure on charter rates. Intermodal data shows average spot rates for a 174,000-m³ LNG carrier fell to US$33,500 per day by the end of July, down from US$39,750 at the start of the month.

The shipbroker expects conditions to improve in 2026, with a wave of LNG projects scheduled to come online. Trade volumes are projected to increase by 10%, alongside an 11% expansion in fleet capacity. “Nevertheless, these projections remain subject to uncertainties, including potential project delays, evolving trade tensions, and broader geopolitical factors,” Intermodal cautioned.

The fleet expanded by six LNG carriers in July, reaching 834 ships with a total capacity of 127M m³ – up 0.7% from the previous month. Larger units dominate the market, with 669 vessels – representing 91% of total tonnage – while steam turbine vessels account for just under a quarter of the fleet at 24%.

The average fleet age stands at 10 years. A total of 98 vessels (about 10% by tonnage) are over 20 years old, while 252 ships (30% of the fleet) are under five years old.

Orderbook and demolition trends

Intermodal’s data shows the orderbook-to-fleet ratio at 44% as of end-July, with 332 vessels under construction, totalling 55M m³. Of these, 53 units are scheduled for delivery by the end of 2025, and 100 more in 2026.

Notably, newbuilding prices have seen a mild decline, slipping to US$251M in July from US$255M in June. However, contracting activity has been subdued in 2025, with buyer interest shifting toward LNG bunkering vessels.

These figures follow record-breaking demolition activity this year, with three vessels totalling 408,000 m³ scrapped in July, bringing the year-to-date total to 10 ships – surpassing last year’s record of eight.

Analysts attribute the rise in demolition volumes to current market conditions, tighter environmental regulations, and the reduced competitiveness of older technology units. Idle rates for steam turbine LNG carriers have also climbed, reaching 18% at the end of July, up from 12% in June – further supporting the scrapping trend.