- Houston–Continent LNG Route Hits Lowest Rates Amid Cold Weather Expectations.
- LNG Period Market Lacks Activity as Oversupply Continues.
- Middle East Gulf LPG Activity Focused on India as Rates Rise.
Hopes of a slight uptick in spot LNG shipping rates were short-lived this week, as newbuild tonnage poured in and cargo demand remained lackluster, further tilting the market into extreme imbalance. There was some interest, but the bids and offers continue to slide down, which bodes poorly for the sector overall, reports Baltic Exchange.
Sharp Drops in Major LNG Routes
The BLNG1 Australia–Japan route, both for the 160k CBM TFDE and for the 174k CBM 2-Stroke vessels, tumbled sharply; rates fell to $3,200–$3,300. The TFDE index finished at $10,800 while the 2-Stroke index ended at $18,400. In comparison with the Atlantic LNG market, it is not worse; rather the drops in this region were even greater in the two BLNG routes, namely, BLNG2 and BLNG3.
Atlantic LNG Routes Suffer Steep Drops
For the BLNG2 Houston–Continent route, the 174k CBM 2-Stroke index fell by $4,121, closing at $19,900, while the TFDE equivalent dropped by $4,000, closing at $12,400. These rates represent some of the lowest seen, especially during a period that is typically supported by cold weather and low gas inventories.
The BLNG3 Houston–Japan route saw the largest decline in the week by $5,200 to $25,300 174k CBM 2-Stroke, while the 160k CBM TFDE index declined $4,100 to close at $16,300.
Sluggish activity in the Period Market
The period market also showed little activity. Short-term rates for six-month charters remained stable at $24,750, while one-year and three-year rates fell to $31,325 and $46,550, respectively. The steadiness in shorter periods is due to ongoing discussions, but the weak interest in longer-term charters combined with an oversupply of vessels—exacerbated by new deliveries—indicates that period rates are unlikely to recover soon.
LPG Market: Activity Focuses on Middle East Gulf
This week, in the LPG market activity coming in from the Middle East Gulf, the primary activity centered on India as four fixtures have reportedly been concluded at near about $60 BLPG1 Baltic equivalent. The pure BLPG1 Ras Tanura–Chiba was only at limited ends. Nonetheless, the rates gained by $2 and closed up at $59.667. TCE earnings stabilized as it saw a daily average of an increment of $852 closing at $39,513 in spite of being a bit unpredictable midweek.
Bearish Sentiment in the Atlantic LPG Market
Activity in the Atlantic was subdued, with bearish sentiment fueled by a long tonnage list and uncertainty over upcoming presidential events. Both BLPG2 and BLPG3 were adjusted lower.
The BLPG2 Houston–Flushing route topped out midweek at around $58 for February-loading fixtures. However, a late-week decline resulted in a $0.50 drop, closing at $56.375, yielding daily TCE earnings of $52,478. The BLPG3 Houston–Chiba route fell $2, with rates continuing to drop toward the weekend. The Baltic’s final rate was published at $100.667, with TCE earnings of $34,940.
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Source: Baltic Exchange
