- LPG Market Surges with Strong Rate Gains Across Key Routes.
- Tight Vessel Supply and Increased Demand Drive LPG Rates to New Highs.
- LNG Freight Rates Rise in Atlantic and Pacific, Time Charter Market Shows Mixed Signals.
The LNG market remained on the up this week, with increases being noted on main trade routes, specifically in the Atlantic basin. Spot market earnings were strong, with the time charter market exhibiting mixed trends, reports Baltic Exchange.
Steady Gains on Key LNG Routes
On the BLNG1 Gladstone–Tokyo route, 174k cbm ships reported earnings increasing by $1,600 to $20,800 per day. Smaller 160k cbm ships also reported increases of $1,200, ending at $12,200 per day, as week-on-week gains were reported steadily.
On the Atlantic, the BLNG2 Sabine–UK Continent route saw considerable gains. 174k cbm ships rose by $4,400 to $25,600 per day, led by increased demand for westbound cargoes. 160k cbm ships rose by $1,700 to $13,800 per day. The BLNG3 Sabine–Tokyo route also had positive momentum with 174k cbm ships increasing by $3,300 to $27,700 per day. Just like that, 160k cbm ships increased by $1,800 to $15,400 per day, upholding a bullish trend for long-distance LNG trades.
Time Charter Market Reflects Mixed Trends
While the spot market was steady, the time charter market saw mixed trends. Six-month charter rates fell by $1,000 to $17,150 per day, while 12-month rates increased by $500 to $23,575 per day. In the meantime, 3-year rates fell by $1,300 to $48,200 per day.
Despite short-term LNG spot market tightness, long-term rate uncertainty presages a more reserved market outlook past the near-term spike in demand.
Bullish Sentiment Pushes Rate Hikes
The LPG market experienced a strong upward move this week, with rates rising across important routes. Tightening vessel supply and expanding demand—particularly in the Atlantic—helped fuel the gains. On the BLPG1 Ras Tanura–Chiba route, rates jumped by $6.86 to $53.03, while TCE earnings rose by $7,129 to close at $36,002. This sudden spike indicates renewed bullishness in the Middle East, underpinned by healthy US export demand and vessel shortage.
The BLPG2 Houston–Flushing route saw a $5.00 increase, taking rates to $53.50. Concurrently, TCE earnings improved by $6,831, to $51,853, reflecting an impressive earnings potential. The best performance was registered by the BLPG3 Houston–Chiba route, with rates jumping by $12.58, to $104.83, reflecting strong market fundamentals. TCE earnings also jumped by $9,452, to close at $38,874, further confirming the bullish market momentum.
Market Outlook
With constricting vessel supply and strengthening demand, the LPG market seems to be in good shape. Yet ongoing observation will be required to ascertain if this bullish trend will continue or if market adjustments will occur in the weeks ahead.
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Source: Baltic Exchange
