Spot charter rates for modern LNG carriers are closing in on the $100,000 per day mark in a market that is traditionally weaker at this time of year.
Shipbroker Affinity (Shipping) put up its rate estimate for 174,000-cbm, two-stroke LNG carriers trading in the Atlantic basin at $95,000 per day.
Brokers described sentiment as “firm” across all types of vessels including tri-fuel diesel-electric (TFDE) ships and steam-turbine tonnage.
Eight year high
Affinity assessed TFDE spot rates for Atlantic tonnage at $72,500 per day, with steamships at $55,000 per day.
The broker said: “Atlantic spot rates are now at the highest April levels since 2013.”
Affinity added that rates for vessels trading in the Pacific, which are about $10,000 per less than those in the Atlantic, have also been “dragged up significantly”.
Clarkson also raised its assessment for a 12-month to 36-month charter of ME-GI LNG tonnage to $90,500 per day. It estimated that it cost $75,000 per day for a similar charter of TFDEs.
The broker said these are the highest levels since January last year.
The rate rises come when levels for LNG carriers are usually fading on the back of warmer weather in the northern hemisphere and seasonal maintenance at production facilities.
Brokers pointed out that this year kicked off with record spot rates which at one point touched $350,000 per day in the face of freezing temperatures in Asia and a shortage of available vessels.
Taking cover
Against this backdrop, and once rates had cooled, some charterers moved early to take period cover for the coming winter, despite market uncertainty.
On 19 April, TradeWinds reported that Flex LNG locked away several vessels on three-year period deals with Cheniere Energy. The deal involves four ships, plus an option for a fifth.
The move takes a further bite into the pool of speculatively ordered newbuildings that were largely trading in the spot market.
Brokers said the deals were tied up at rates in the low $70,000-per-day range.
Capital Gas is also reported to have tied up two of its uncommitted LNG newbuildings on period hire.
Tonne-mile boost
Strong forward LNG pricing in Asia, a rise in US production and the disappearance of the cargo cancellations seen in coronavirus-hit 2020, has continued the raid on period and spot tonnage, shrinking the number of available ships and pushing rates upwards.
The longer US to Asia voyage will also boost the tonne-mile position for vessels, keeping them out of the market for longer.
Affinity is predicting further rate rises to cover “numerous spot and period requirements” and declared owners’ ideas on levels as “increasingly bullish”.
The London-based broker expects a volatile market towards the end of the year.
Others point out that the LNG market is finely balanced and say a few more or less open vessels can tip the market either way.
