Spot charter rates for modern LNG carriers have tumbled to seasonally low levels ahead of what is commonly a very strong period.
Brokers are pegging levels for two-stroke vessels in the $60,000 per day region, down 13% week on week for ships trading in the East and several percentage points lower for those in the Atlantic region.
Charter activity across the market is described as low — or, as one owner put it, “a bit boring” — with a limited number of fixtures reported.
These rates are far below the $90,000 per day to more than $100,000 per day breakeven levels that owners say they need to earn on this type of tonnage.
Levels for other types of tonnage have also crashed back, and while rates in the Atlantic region appear to be the strongest, those in the Pacific region for tri-fuel diesel-electric (TFDE) vessels were down 25% in the week at $45,000 per day and more than 20% for steam turbine tonnage at $27,500 per day.
Affinity (Shipping) said it is seeing “limited enquiry” for vessels in the first half of November, although the interest would appear to pick up for the second part of that month.
The broker described the market in the East as “dormant”: just five fixtures were recorded for East of Suez in September compared with 18 in the same month of 2023.
Others report a build-up of open tonnage in the region.
MB Shipbrokers reported that several two-stroke LNG are showing as open from October and November through into February, with some utilities also able to offer vessels for periods of up to one year.
Owners and brokers suggested that charterers could wait it out and allow rates to come down as low as possible before booking their winter cover.
One said the market is at “a bit of a standstill”, suggesting that the low-level fixtures could be the result of charterers pushing out their sublet tonnage and being prepared to fix vessels at any rate before they are needed during the colder and traditionally higher demand winter period.
Affinity — which is dubbing the short and medium-term sentiment as “bearish” across all vessel types and regions — suggested the market could start to see more independent owners of TFDE vessels in the 155,000 cbm to 165,000 cbm operating in the spot market.
Shipowners have been chartering their vessels out on term business, but many of these are now up for redelivery. A swathe of steam turbine tonnage is also expected to come off long-term hire.
Clarksons’ data shows that spot rates for 174,000-cbm two-stroke LNG carriers averaged $124,837 per day in 2023, whereas the corresponding figure to date for 2024 is $61,595 per day. However, busy winter trading could improve this year’s figure.
