Spot charter rates for LNG carriers have strengthened ahead of the traditionally busy winter trading season — but players are cautious about how high they will go.
Brokers said there has been a rise in the number of spot charters concluded, with Asian buyers taking on tonnage to cover shipments, on the back of Covid-19 demand recovery and as buyers stock up for the colder months.
Two-stroke gas-injection vessels are commanding rates in the high $70,000-per-day range in the Atlantic and levels starting with a “7” in the other basins, one broker commented.
Tri-fuel diesel-electric LNG carriers are earning rates in the mid to high $60,000s per day in the West, with levels dipping into the $50,000s in Asia.
Rates for steam turbine ships are more than $40,000 per day across all basins.
Available tonnage is particularly thin in the Atlantic basin, prompting market talk that vessels may be repositioned from the East to cover expected November and December cargoes.
But market watchers are cautious about how the season will play out due to supply challenges and uncertainties over Covid-19 demand recovery in Europe, set against newbuilding deliveries and the potential for relet vessels to emerge.
‘Very attractive’
They highlighted the outages at liquefaction plants that have tightened supply.
These include storm-damaged Sempra Energy’s Cameron LNG in Louisiana — which had recently resumed exports ahead of the incoming Hurricane Delta — Norway’s fire-hit Snohvit LNG facility and Gorgon LNG in Western Australia.
Oleg Vukmanovic, head for Europe and Africa in Poten & Partners’ business intelligence unit, said that while LNG demand from Asia has increased, European imports remain weak. But he said “economics and arbitrages for exports out of the US are looking very attractive”.
Shipbroker Braemar ACM said the number of expected LNG newbuilding deliveries might prompt the market to start sliding back in the late December-January period.
It also highlighted the potential for market disruption from relet tonnage, which has been a recurring factor this year as major charterers try to balance their shipping portfolios.
“There are mixed feelings as to whether we will see the rates for [gas-injection], two-strokes breaking $100,000 per day this year,” the shipbroker said.
