- LNG Sector Sees Echoes of 2021 and 2023 Acquisition Wave.
- Maritime LNG Transport Remains Attractive for Investors.
- Weekly Correction Driven by Weakness in Asian and Middle Eastern Stocks.
The UP World LNG Shipping Index (UPI), which keeps an eye on listed LNG shipping companies, dipped by 1.69 points (0.98%), wrapping up at 170.61 points. Meanwhile, the S&P 500 index also took a hit, losing 0.31%. The chart below shows how both indices performed over the week, reports LNG Shipping Stocks.
CoolCo Delisting Announcement
The big news this week is the upcoming delisting of Cool Company (NYSE/OSE: CLCO) from public trading. Eastern Pacific Shipping, which holds a 59.3% stake, is offering $9.65 per share for the buyout. This deal is expected to close sometime between the fourth quarter of this year and the first quarter of 2026.
The last major wave of acquisitions in the LNG shipping sector happened in 2021, when Teekay LNG Partners and GasLog struck a buyout agreement, followed by GasLog Partners and Golar LNG Partners in 2023.
Investment Outlook for LNG Shipping
Maritime LNG transport remains a promising area for investment, as shown by the UPI staying above 170 points. Previous reports have pointed out that worries about declining LNG spot rates are easing. Although rates are still quite low, they haven’t been the focus of much discussion lately. Last week, concerns about fragile growth were confirmed, with the UPI correcting by less than one per cent. This downturn primarily impacted stocks in Asia and the Middle East.
Constituents’ Weekly Performance
- Strong Gainers: CoolCo took the lead this week with an impressive growth of 18.54%. Following closely was Awilco LNG (OSE: ALNG), which saw an 11.1% increase, bouncing back to support levels we last saw in December. Excelerate Energy (NYSE: EE) climbed 5.3%, while BP (NYSE: BP) added 4.6% to its value. Shell (NYSE: SHEL) grew by 3.69%, Chevron (NYSE: CVX) saw a 2.53% rise, and Golar LNG (NYSE: GLNG) increased by 3.7%. Flex LNG (NYSE: FLNG) was a bit more cautious, with a modest gain of 1.6%.
- Decliners: On the flip side, New Fortress Energy (NYSE: NFE) experienced the largest drop, falling by 9.83%. Exmar (BSE: EXM) decreased by 5.67%, and Cosco Shipping Energy (SS: 600026) corrected by 5.4%. MISC (KLSE: 3816) saw a decline of 3.1%, while Nakilat (QSE: QGTS) dropped 3.31%. Dynagas LNG Partners (NYSE: DLNG) also faced a setback, losing 3.5%.
- Stagnant and Regional Trends: Korea Line Corporation (KRX: 005880) remained flat despite a 4.6% dip. Japanese stocks also took a hit, with NYK Line (TSE: 9101) down 2.1%, ‘K’ Line (TSE: 9107) down 1.8%, and MOL (TSE: 9104) down 1.7%. The UPI is still holding above 170 points, but Asian stock performance isn’t providing much support.
Market Outlook – Crystal Ball
Even with the rising global uncertainty stemming from the US administration, the overall outlook stays positive. That said, we should brace for increased volatility in the weeks ahead. LNG spot rates are on the rise, but their effect is still minimal for most UPI constituents.
The market is closely watching for potential breakouts at key resistance levels that could determine the next price direction. In the long term, the outlook remains positive. Strong LNG demand, coupled with management-driven strategies and new long-term contracts, continues to paint a promising picture. Investors should monitor policy developments, competitive dynamics, and corporate earnings for further guidance.
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Source: LNG Shipping Stocks
