Shipping Market Trends Show Pressure on LNG and LPG

By
Mfame Editor
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28

  • Declining rates due to vessel oversupply, cargo scarcity, and Freeport delays. Atlantic routes saw sharper rate drops than the Pacific.
  • Minimal fluctuations with slight increases in short-term rates but little recovery expected due to vessel oversupply.
  • Bearish sentiment with falling rates across key routes driven by weakening demand and surplus vessels.

LNG Market Update

The LNG shipping market has seen a further decline in sentiment, according to the Baltic Exchange. Driven by excess tonnage, a lack of cargoes, and delays at Freeport, the market experienced another downturn, with the most recent fixture involving a 2-stroke deal being made at sub-$10,000 and less than 100% round-trip earnings.

On the BLNG1 Australia–Japan route, rates for 160k cbm TFDE and 174k cbm 2-Stroke vessels dropped by $1,600 and $1,800, respectively, closing at $8,600 and $15,400. While the Pacific market performed better, the Atlantic saw more significant rate declines:

  • BLNG2 Houston–Continent: 174k cbm 2-Stroke rates fell by $8,100 to $9,500, and TFDE rates dropped by $5,400 to $4,400.
  • BLNG3 Houston–Japan: 2-Stroke rates declined by $8,900 to $14,200, and TFDE rates fell by $7,800 to $7,100.

In the term market, short-term rates rose slightly by $450 to $25,200 for six-month charters, while one-year rates decreased by $600 to $30,725. A modest increase of $1,700 brought three-year rates to $48,250. However, recovery in period rates remains unlikely due to persistent vessel oversupply.

LPG Market Update

The LPG market saw a bearish shift with declining rates across key routes, driven by reduced demand and an oversupply of vessels. On the BLPG1 Ras Tanura–Chiba route, rates dropped by $12 to $47.33, and daily TCE earnings fell sharply by $12,573 to $27,075, reflecting weaker demand.

In the Atlantic basin, similar declines were observed:

  • BLPG2 Houston–Flushing: Rates fell by $2.63 to $53.25, with daily TCE earnings down by $3,488 to $49,002.
  • BLPG3 Houston–Chiba: Rates declined by $1.92 to $97.58, with daily TCE earnings at $33,160. A lack of inquiries and vessel oversupply further weakened this route.

The market outlook remains cautious, with continued reduced activity and downward pressure on rates expected in the short term.

 

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Source: Baltic Exchange