- LNG spot market gains: Slight increases in rates for 174cbm vessels due to rising cargo demand and tighter tonnage supply, but overall freight levels remain low.
- LPG market stagnation: Minimal activity and flat rates, with quiet cargo stem lists indicating subdued market sentiment as the holiday season approaches.
- Baltic charter rates: Declines observed across 6-month, 1-year, and 3-year LNG charter periods, reflecting a preference for spot positions over longer-term commitments.
- TCE equivalents: Marginal rate movements for both LNG and LPG routes, with limited optimism for significant changes in the near term.
LNG Market Overview
The Baltic Exchange reported moderate gains in LNG spot rates, particularly for 174cbm vessels, driven by increased demand and tighter availability. However, these improvements arise from low baseline freight levels, curbing enthusiasm within the market.
- BLNG1 Aus-Japan Route: Rates for 160cbm TFDE ships remained unchanged at $16,000, while 174cbm 2-Stroke vessels saw a modest $2,200 increase to $25,800. Eastern market sentiment remains cautious amidst ongoing challenges.
- BLNG2 Houston-Cont Route: Minimal increases were observed, with 160cbm TFDE rates rising by $400 to $10,700, and 174cbm 2-Stroke vessels gaining $2,200 to reach $17,400. Holiday-driven demand has yet to significantly impact sentiment.
- BLNG3 Houston-Japan Route: This route saw the strongest performance, with 160cbm TFDE rates up by $800 to $15,300 and 174cbm 2-Stroke vessels climbing $4,000 to $27,200.
Despite these movements, period charter activity remains muted. Many owners prefer index-linked spot charters over locking in longer commitments.
- 6-Month Period Rate: Fell by $1,100 to $27,250.
- 1-Year Period Rate: Declined to $39,650.
- 3-Year Period Rate: Dropped by $2,200 to $58,000.
LPG Market Insights
The LPG market remains sluggish, with December cargo activity showing minimal movement. Both the Middle East Gulf (MEG) and West Africa (WAFR) regions reported sparse fixtures, keeping rates largely flat.
- BLPG1 Ras Tanura-Chiba Route: Rates peaked mid-week at $51.667 before settling at $50.833, translating to a TCE equivalent of $31,417.
- Atlantic Routes: Both the BLPG2 Houston-Flushing and BLPG3 Houston-Chiba routes experienced minor rate changes. Houston-Chiba rates increased by 47 cents to $105.667, with a daily TCE of $40,846. Houston-Flushing rates saw a 50-cent rise, closing at $58.75, with a TCE equivalent of $58,142.
The quiet cargo stem list and tonnage levels closely aligned with cargo availability suggest that this subdued market state may persist through the holiday period.
Outlook
As the year-end approaches, both LNG and LPG markets face challenges that may dampen prospects for significant rate movements. While some gains were recorded, particularly in LNG, the overall sentiment remains cautious. Period charter rates continue to decline, and owners favor spot opportunities. The LPG market shows little indication of breaking from its current stagnation.
Did you Subscribe to our daily newsletter?
It’s Free Click here to Subscribe!
Source: Baltic Exchange
