Flex LNG's Oystein Kalleklev thinks LNG carrier rates can stay sky high.
Speaking with J Mintzmyer on the Value Investors Edge Live podcast, Kalleklev said the combination of a cold winter and Panama Canal congestion could maintain rates assessed as high as $160,000 per day by Poten & Partners on Tuesday.
"How this winter weather plays out will have a big impact on not only the [first quarter] freight market, because if you have a very good winter ... which is a cold one, you will also get inventories down to a bad level," he said.
Kalleklev, whose New York and Oslo-listed company has 13 ships in its stead, said the US hurricane season and plant shutdowns in Norway and Australia delayed the usual seasonal strength for LNG carriers until October.
Then, he said, rates hit $100,000 per day, a dramatic reversal of the $33,000 per day rates Poten quoted in May.
Poten's $160,000-per-day assessment was for a 160,000-cbm tri-fuel diesel-electric carrier sailing west. A similar ship heading east would fetch $150,000 per day.
Kalleklev said those rates can stay up if the cold winter forces inventory drawdown, which could push some ships into floating storage duty.
Further, the number of ships available is lower than usual, with it taking as much as a week longer for ships to transit the Panama Canal.
He said some ships were opting to sail around the Cape of Good Hope for voyages between the US and Asia, adding two weeks to voyages.
Further, Kalleklev told Mintzmyer that there were reports circulating that a few cargoes had been cancelled in January due to a lack of ships from the Panama Canal congestion.
