- LNG spot rates are experiencing continued downward pressure in the East.
- Rates for various routes, including Australia-Japan and Houston-Continent, have seen notable declines, impacting earnings for both LNG and LPG carriers.
- The typically seasonal rise in LNG rates is absent, and longer-term rates suggest prolonged rate pressure.
- The LPG market has also softened, with steady to flat longer-term rates and decreased earnings.
The Baltic Exchange highlights the declining LNG and LPG freight rates in key Eastern routes, with limited demand for spot fixtures as rates fall. On the LNG front, several inquiries are being processed on an FOB basis, reducing the number of cargoes for which vessels can bid. For instance, the 174cbm 2-stroke vessel rate on the BLNG1 Australia-Japan route declined by $2,814 to $32,400, and the 160cbm TFDE vessel index saw a $3,009 drop, closing at $21,500.
Further Declines on BLNG3 and General Market Outlook
The BLNG3 Houston-Japan route mirrored the declines seen in BLNG1, with rates for the 174cbm, 2-stroke vessels falling by $1,624 to $31,300. The 160cbm TFDE vessels fared slightly worse, dropping $2,636 to close at $20,400. Overall, the LNG spot market is missing the upward rate trend typically associated with winter. The Baltic BFA is seeing low trades for Cal25 and Cal26, suggesting that pressure on rates may extend through next year. Longer-term contracts remain relatively flat, with limited demand for 1-year or multi-month deals. However, all three Baltic periods dropped; the 6-month period fell to $33,800, the 1-year term to $47,100, and the 3-year term to $64,550.
LPG Market Trends and Rate Shifts
The LPG market saw few negotiations or fixtures this week, with one deal already reaching into the December fixing window. The BLPG1 Ras Tanura-Chiba route dropped by $6.065, reaching a final publication price of $47.667, equivalent to a daily TCE earning of $27,305. The US market, amid a post-election adjustment, showed limited activity, and longer-term rates remained flat as tonnage availability slowly increased. The BLPG3 Houston-Chiba index dropped by 50 cents to $98.333, with a daily TCE earning equivalent of $33,686. On the BLPG2 Houston-Flushing route, the rate decreased by 75 cents, settling at $55.25, with TCE earnings falling by $1,836 to $52,494.
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Source: Baltic Exchange
