Spot LNG shipping rates drop below $50,000 per day

Spot charter rates for the global liquefied natural gas (LNG) carrier fleet dropped below $50,000 per day this week, while European prices increased for the fifth week in a row.

Last week, Atlantic LNG freight rates rose and Pacific rates dropped compared to the week before.

“The Spark30S Atlantic spot rate fell by $7,000 per day to $46,500 per day, whilst the Spark25S Pacific rate fell by $750 per day to $48,500 per day,” Qasim Afghan, Spark’s commercial analyst told LNG Prime.

“This is the first time since May 2023 that freight rates in the Atlantic and Pacific (assessed for 174 2 stroke vessels) have both fallen below the $50,000 per day mark,” he said.

Image: Spark

LNG freight rates remain low despite the fact that LNG carriers are still avoiding the Suez Canal due to the situation in the Red Sea and the lower LNG transits in the Panama Canal due to a drought situation.

Since January, LNG carriers, including Qatari vessels delivering LNG shipments to Europe, are favoring the Cape of Good Hope for safer passage.

Kpler previously said that the Suez Canal has witnessed no LNG transits since January 17.

Also, US LNG exports being sent round the Cape of Good Hope jumped in March.

Platts said in a report this week that a record 24 US LNG cargoes have travelled to Asia via the Cape of Good Hope this month as of March 27.

It is also a record in terms of cargo size, with nearly 1.6 million mt of US LNG reaching Asia via the Cape of Good Hope in March, Platts said.

European prices continue upward trend

In Europe, the SparkNWE DES LNG front month rose compared to the last week.

The NWE DES LNG for April was assessed last week at $8.054/MMBtu.

“The SparkNWE DES LNG front month price for April delivery is assessed at $8.43/MMBtu and at a $0.350/MMBtu discount to the TTF,” Afghan said.

He said this is a $0.376/MMBtu increase in DES LNG price, marking the fifth consecutive weekly increase in SparkNWE DES LNG price.

Image: Spark

Levels of gas in storages in Europe are at high levels following a mild winter.

Data by Gas Infrastructure Europe (GIE) shows that gas storages in the EU were 58.81 percent full on March 27. Gas storages were 59.29 percent full on March 21, and 55.90 percent full on March 27 last year.

One Freeport LNG train operating

US LNG exports remained almost flat in the week ending March 27 compared to the week before as the Freeport LNG terminal in Texas operates at reduced levels.

The LNG terminal operator told LNG Prime last week that its third train is currently online and producing LNG, while the “train 2 liquefaction unit is now offline and our train 1 liquefaction unit will be taken down imminently.”

This week, JKM, the price for LNG cargoes delivered to Northeast Asia, rose when compared to the last week, according to Platts data.

JKM for May settled at $9.535/MMBtu on Thursday.

State-run Japan Organization for Metals and Energy Security (JOGMEC) said in a report earlier this week that the JKM “rose to nearly $10 on March 18 from $9 the previous week due to a cyclone in Australia and trouble at a liquefaction facility in the US.”

“However, it dropped to $9 on March 22 amid sluggish demands and declined buying interests due to price hikes since then,” it said.

Japan’s METI recently said that Japan’s LNG inventories for power generation as of March 24 stood at 1.52 million tonnes, down 0.9 million tonnes from the previous week and the lowest level since the end of January 2021.

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