Singapore-based Spark Commodities reported its first-ever negative spot LNG freight rate, some three months after charter rates for the global LNG carrier fleet hit their record highs.
LNG freight rate for a 160,000-cbm TFDE carrier reached -$750 a day in the Atlantic on Monday, according to Spark.
“This highlights how current vessel charter payments for the Atlantic basin do not cover the fuel cost of ballasting the vessel back to the load-port, reflecting an increase in vessel availability and a reduction in charterer requirements,” Spark said.
Compared to $2,500 a day on Friday, the Spark30S Atlantic assessment dropped $3000 or 133 percent.
On the other side, the Pacific rate also continued to drop and it reached $16,250 a day.
This marked a drop of 16 percent compared to $23,000 a day on Friday.
To remind, the Spark25 Pacific spot rate hit a record high of $374,500 per day on November 26, meaning it dropped by about $351,000 since then, while the Atlantic rate dropped about $290,000 since November when they rose on high Asian demand.
However, the spot market has changed completely in the meantime as high demand and prices attracted a huge number of cargoes, mostly from the US, to Europe.
Record LNG imports pushed down TTF gas prices, with European power prices falling accordingly.
In addition, a mild Asian winter combined with healthy levels of contract cover has seen Asian LNG demand crumble over the last couple of months.
“This has driven winter JKM prices well below TTF signaling the redirection of surplus LNG supply towards Europe,” Timera Energy said in a report on Monday.
“These conditions have resulted in several days of record LNG sendout in January. They have also driven spot LNG charter rates to crash across the last two months,” the London-based consultancy said.