LNG and LPG Freight Markets Struggle Amid Winter Rate Declines

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  • LNG Freight Market Remains Bearish as Winter Rates Decline Further
  • Key LNG Routes See Spot Rate Drops Amid Low Liquidity
  • Long-Term LNG Period Rates Fall, Minimal Interest in Multi-Month Contracts

The LNG and LPG freight markets will face a rather tough winter season. There is a bearish trend hovering over both the spot and long-term rates. Major routes have been witnessing massive declines in the case of LNG. There has been little interest with low liquidity and intra-basin movements, and chances of recovery by the end of Q4 seem less probable. Brokers will experience one of the toughest rate periods this year till then, reports Baltic Exchange.

Spot Rates Declines Continue Across LNG Routes

The LNG spot market remains in bearish trend as winter rates failed to halt the anticipated trend. The reported fixes are now priced at relatively lower levels, and hopes in the spot market remain low.

  1. BLNG1 (Australia-Japan): The rates plummeted with 160cbm TFDE at $6,087 lower at $24,913 and 174cbm 2-stroke at $3,687 lower at $41,813.
  2. BLNG2 (Houston-Continent): Ship rates for the 174cbm 2-stroke were reported at $20,901, however, the recent fixtures were reported at a lower rate of $17,500. The 160cbm TFDE ship rate decreased by $5,186 to $13,714.
  3. BLNG3 (Houston-Japan): Rates had a rough week. The 174cbm 2-stroke rate was down by $7,614 to $37,584 and the 160cbm TFDE rate decreased by $8,923 to $25,777.

Limited Activity in LNG Period Market Long-Term

The period market remains soft, with little appetite for longer-term deals as winter rates and the spot market continue to soften.

  1. 6-Month Term: Rates down by $12,650 at $53,550.
  2. 1-Year Term: Rates down by $5,000 at $57,625.
  3. 3-Year Term: Rates down by a lesser amount, down $1,650 at $74,700.

LPG Market: Rate Stabilization Amid Lower Sentiment

The Ras Tanura-Chiba route has stabilized despite declining rates for the week.

BLPG1 (Ras Tanura-Chiba): Rates declined by $9.736, closing at $47.167 with a daily TCE equivalent of $26,677.

Houston-Chiba and Houston-Flushing Rates Stable

Across the Atlantic, LPG rates have stabilized with minor declines.

  1. BLPG3 (Houston-Chiba): Rates declined by $6.667, closing at $106.833 with a daily TCE of $40,273.
  2. Houston-Flushing (BLPG2): Rates were at $1.5 cheaper to $59.25, putting the plant at a daily TCE of $57,842.

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Source: Baltic Exchange