DNB Markets has taken a red pen to its LNG carrier rate forecasts despite its confidence earnings will break the $100,000-per-day barrier this winter.
Its analysts expect rate for LNG carriers — a market which has been disrupted by a trade war between the US and China — to peak in 2020 before cooling in the following two years.
DNB analysts led by Nicolay Dyvik believe the impact of newbuildings ordered in a record-setting 2018 and slowing demand growth will influence the market.
In an update, Dyvik said LNG carrier spot rates had averaged $50,000 per day so far this year but should climb to $120,000 per day in December.
Its revised forecasts are for sailed-in TFDE spot rates of $44,000 per day this year, before peaking in 2020 at $62,000 per day.
With US President Donald Trump continuing to wage a trade war, US to China LNG shipments are down 60%, according to DNB’s numbers.
However, it is China and India approaching near-full capacity utilisation on import regas capacity this year and next which is having a greater influence on the bank’s LNG rate forecasts, given growing bottlenecks.
DNB is forecasting LNG carrier rates to slip to $54,000 per day in 2021 and to $42,000 per day in 2022.
"We have cut our LNG rates as two out of the top three importers are set to reach full regas utilisation, resulting in lower tonne-mile and low gas prices," the analyst explained.
"We forecast rates to double by Q4 2019, and utilisation to peak in 2020 ahead of a decline in utilisation until 2022."
