- Rates drop due to limited cargo availability.
- Lack of need for TFDE’s, ‘out of the market’.
LNG freight rates have seen historic lows in the week ended on Jan. 23, in both the Atlantic and Pacific Basins, as ships accumulated due to a limited availability of cargo, reports Platts.
LNG freight rates witness historic lows
In the week ended on Jan. 23, tri-fuel diesel electric carrier rates have fallen much faster than two-strokes, as market participants said there was no reason for buyers to go for TFDEs, with two-strokes being so cheap.
“I doubt anyone would pay $8,000/d for a TFDE if you can get a two-stroke for $9,000-$10,000/d,” a shipbroker said.
Platts, part of S&P Global Commodity Insights, assessed the Atlantic TFDE carrier day rate at $6,500/d on Jan. 23, an all-time low, with a ballast bonus of 80%, down $9,500 over the week. Platts also assessed Asia Pacific TFDE carrier day rates at $8,000/d on Jan. 23, with a ballast bonus of 100%, dropping $4,500 over the week.
Two-stroke carriers have also seen a decrease in the past week, due to a severe over-supply of tonnage and very little uncontracted cargoes.
Platts last assessed Atlantic two-stroke carrier day rates at $10,000/d on Jan. 23, with a ballast bonus of 80%. This brought the drop to $15,000/d on the week. Platts also assessed Asia Pacific two-stroke carrier day rates at $15,000/d with a ballast bonus of 100%, down $7,000 over the week.
“Rates will be like this for a week or two I think… with two-strokes below $20,000s/d TFDEs are basically out of the market,” a shipbroker said.
With TFDEs consistently below $20,000s/d for the past months (since mid-October 2024) the need of TFDEs over two-strokes has diminished, and TFDEs have been cast out.
“Too many newbuilds entered the market… And there’s no arbitration, no contango, and no real demand from China/Japan,” a shipbroker said, when asked about the main reasons for the oversupply of available carriers and the lack of cargo.
The lack of demand in the East further exacerbated the oversupply problem and contributed to the falling rates and struggling market in general, according to sources.
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Source: Platts
