- The LNG market faced a challenging year in 2024, marked by subdued activity and minimal rate changes during the festive season.
- The BLNG1 174k CBM 2-Stroke index showed a slight increase, while TFDE indices saw marginal declines.
- In the LPG market, the Ras Tanura–Chiba route recorded gains, but Houston–Chiba faced downward pressure despite ongoing activity.
- Period charter rates for LNG declined across six-month, one-year, and three-year terms, reflecting a cautious market sentiment as the year ends.
LNG Market Overview
As reported by the Baltic Exchange, the LNG market faced a turbulent 2024, with conditions proving more challenging than anticipated. While macroeconomic factors played a role, some underlying causes for the downturn remained unclear. The year-end festivities have coincided with subdued activity across most routes.
The BLNG1 174k CBM 2-Stroke index saw a modest rise of $1,100, closing at $22,300. Conversely, the BLNG1 160k CBM TFDE index remained largely stagnant, recording a slight decline of $200 to end the week at $14,000. Atlantic routes followed a similar trend, with BLNG2 Houston–Continent for 174k CBM 2-Stroke vessels increasing by $800 to close at $23,200. The 160k CBM TFDE equivalent fell by $600, settling at $14,000.
The BLNG3 Houston–Japan route also exhibited mixed results. The 174k CBM 2-Stroke segment rose by $1,000 to $29,400, while the 160k CBM TFDE segment dipped by $400 to end at $17,000. Prolonged tonnage length and reduced enquiry levels exerted bearish pressure, particularly on TFDE rates.
The period market remained quiet, with six-month charters declining to $25,600 per day. One-year periods dropped to $33,067 per day, and three-year terms saw a significant decline of $10,250, closing at $43,600 per day. As brokers and owners conclude their year-end assessments, there is hope for renewed opportunities in 2025.
LPG Market Dynamics
The LPG market entered the festive season with expectations of robust rate increases, driven by Saudi acceptances. However, the rate hikes fell short of projections. A reported fixture at $67 failed to inspire broader market movement.
The BLPG1 Ras Tanura–Chiba route continued its upward trend, gaining $3.084 to close at $62.667. TCE earnings for this route rose to $45,216 per day. In contrast, BLPG3 Houston–Chiba struggled despite ongoing cargo activity and tight tonnage availability for West cargoes. The route dropped by $3.5, closing at $110.167, with daily TCE earnings falling by $3,134 to $44,936 per day.
Limited activity was observed on the BLPG2 Houston–Flushing route, with one reported fixture including an option to discharge in the UK Continent. The index fell by $2.25, settling at $0.75. Nevertheless, TCE earnings remained strong at $61,274 per day despite the lack of significant rate changes.
As 2024 comes to a close, both LNG and LPG markets are poised for a fresh start in the new year, with participants anticipating a shift towards more favorable conditions.
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Source: Baltic Exchange
