- strong prices, demand-pull more Atlantic cargoes to Asia
- more eastward voyages around Cape of Good Hope also seen
The Panama Canal Authority is monitoring for high arrivals of LNG ships during the early part of July following a surge in transits during the final week of June says an article on S&P Global
Monitoring surge in LNG transits
Panama Canal watching for a surge in LNG transits to continue during early July.
Challenges
The price impact from the strong fundamental demand in Asia that has been pulling cargoes from the Atlantic into the Pacific has been augmented by unusually high European hub prices.
The European market tends to set the floor price for LNG globally, with movements in that market tending to filter through to other markets, including the traditionally premium markets in Northeast Asia.
Ships with reservations transit on their booked day, while those without reservations are subject to long waits.
The higher round-trip economics implied by longer waiting times could begin to provide an incentive for even more transits around the Cape of Good Hope. And in marginal cases, that could end up constraining some cargoes to the Atlantic Basin.
To ease congestion
In February, the Canal administrator said the agency was working to add a third daily reserved transit slot for LNG vessels to ease congestion.
At times, delays have caused supply disruptions and extra shipping costs for the market, while unpredictable weather and increased spot trading of LNG cargoes can alter the destination mid-voyage and cause the Canal to lose revenue when it receives a cancellation.
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Source: S&P Global
