We couldn’t have expected that by Christmas time when the weather is as cold as it currently is, we would have an oversupply of tonnage and a drop in rates. The period has been the mainstay for LNG with most of the activity covered with term business. We have seen highs of over $500 k PD round trip in Q4, and although those levels have fallen away, the outlook is positive. Rates will rebound and a bullish take on 2023 is positive for LNG on all routes. This week all three routes have again fallen short of a Christmas miracle. Subdued fixing and tonnage supply have kept rates soft and all three routes have seen falls between $12,000-$16,500 over the week. Term fixtures are ongoing and parties are still in discussions for several bits of business for 2023. Current estimations for a 174k 2-Stroke vsl with 0.085% boil off: $206,250 for 12 months, and $177,000 for three years.
BLPG1 has been flat this last week, with rates shifting only $1.571 down to close at $138.286 for a run Ras Tanura-Chiba. December has all been fixed away and the focus has shifted to the New Year. Reluctance to fix too far out suggests that there could be a softer sentiment from charterers. And while owners may complain of sluggish sentiment, ultimately – with a TCE round trip earning of $128,232 per day – they are shedding crocodile tears.
BLPG2 has shown barely any life with minimal shifts over the week closing at $128.2 a drop of 60 cents over the week. Slightly more life was shown on BLPG3, where a drop below $200 is bringing back some bearish sentiment. The first half of January has been fixed away and charterers are beginning to look ahead. But with a tighter tonnage list and weather issues coming into play, it could be that we see little change over the next few weeks as charterers look for firm itineraries and safer bets to fix away.
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Source: Baltic Exchange