- Spot rates drop across key routes as oversupply and limited demand persist.
- BLNG1 Aus-Japan holds steady while Houston-Cont sees sharp declines.
- Rising LNG bunker prices and flat freight rates threaten market stability.
The gas market was mixed in Week 47 (22 November 2024), with quiet conditions in the LNG spot market following a week of very large enquiries. LNG spot routes continue to lose ground with oversupply against limited demand pushing rates down and increasingly raising earnings loss concerns. Compared with this, the LPG market in the Eastern sector has been more positive. Several cargoes have been fixed and rates fluctuated according to such movements. The US LPG market, however, remained stable with little change in rates, reports Baltic Exchange.
LNG Market Overview
A quiet week for the LNG spot market. After a busy week last week for spot enquiries, owners and brokers are now seeing very little activity. The market has taken a big tumble across all three routes and for both ship sizes. Continued pressure from an oversupply of tonnage combined with limited enquiry has so far prevented any recovery in spot rates.
Key LNG Route Performance
- BLNG1 Aus-Japan held the most ground amongst the three routes with the 160cbm TFDE ship losing only $900 to close at $16,000 while the 174cbm 2-Stroke index lost $4200 to finish at $23,600.
- BLNG2 Houston-Cont felt the cold with a drop of $10,100 on the 174cbm 2-Stroke index down to year lows of $15,200 while the 160cbm TFDE index lost a little less at $3700 but is still feeling the pinch publishing at $10,300. Concerns today that ships might suffer losses should LNG bunker prices maintain their uptrend and freight stay flat the market is looking at a cold winter.
- BLNG3 Houston-Japan had one fixture with an option in high teens but the 174cbm 2-Stroke ships losing $9500 published just higher at $23,200 and the 160cbm TFDE ship lost $5500 to close out at $14,500.
The period would have been the focus of many brokers as the spot market stagnated, but with rates for multi-month and short terms coming down, there is a lack of lustre sentiment, and the availability of terms from charterers outweighs the availability of ships. The Baltic 6-month published at $28,850 while our 1-year term was down to $41,550. The 3-year period also felt the pinch down $2500 to $60,200.
LPG Market Overview
The East market has been quite lively, with several cargoes fixed, causing the index to flux, reaching a high by the end of the week. Some confusion over parcels led to a midweek dip but rates finished positively due to a solid list of tonnage and high levels of activity. Rates for BLPG1 Ras Tanura-Chiba were up $2.222 to close at $51.167 which gives a daily TCE Earning equivalent of $31,709 a rise of $2484 over the week.
US Market Stability
While the Eastern market continued its march upward, the US market was more than happy to sit pretty flat. BLPG3 Houston-Chiba was characterized by a few owners but this did mean that that has kept rates stable, but they will need cargoes if they are to ward off any sentiment-driven correction. Rates fell negative by $1.584 to close at $105.583 which gave a daily TCE earning equivalent of $40,703. BLPG2 was predictably quiet moving only 25 cents on the week down to $58.5 and a daily TCE earning equivalent of $57,713.
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Source: Baltic Exchange
