Charter rates for LNG carriers have turned upwards, with those for modern vessels moving above the $200,000-per-day mark amid increased demand and growing concerns about a range of geopolitical factors.
In what has been a very volatile winter trading market to date, brokers and LNG market players are reporting that enquiry for vessels has picked up in the last two weeks, with a rush of market enquiries.
Brokers said this has diminished the pool of available LNG carriers but it is unclear if the level of demand will be sustained as the colder winter weather that could be expected for the northern hemisphere at this time of year has yet to materialise.
Spot charter rates for modern two-stroke LNG carriers are now being pegged at over $200,000 per day by brokers. They had reached this level already in the approach to winter but had slipped back.
Affinity LNG put rates for vessels fixed out of the Atlantic basin on long-haul business at $220,000 per day.
Recent reported fixtures have been concluded for at least two vessels under energy major Shell’s control, which have attracted levels around the $190,000 to $195,000-per-day range.
Overall, Atlantic rates are higher with more enquiries emerging in this region.
Steamer spotlight
Brokers said that at the other end of the vessel spectrum, owners of steam turbine LNG tonnage are reporting interest from charterers, which indicates that there could be more demand in the market.
They said steamers currently make up the bulk of open tonnage and could expect to see more fixtures and improved rates in the coming weeks if demand continues.
One described this week as “the eye of the storm”.
Some are now looking to the vessels that will be fixed for later in December or January loading dates to give an indication of charter rate directions.
There has been a slight pick-up in term charter business, which has improved sentiment with fixtures for modern two-stroke tonnage attracting levels of around $95,000 per day or above for one-year periods.
A Cheniere relet, TMS Cardiff Gas’ 174,0000-cbm Cobia LNG (built 2021), was reported fixed to New Fortress Energy for a two-year period at $100,000 per day.
But warmer-than-anticipated weather and high gas storage levels in Europe are translating into a less feisty rate environment for LNG carriers than seen in the previous two years.
Instead, brokers said market players are looking at the mix of delays to Panama Canal transits, global conflicts and areas of political tension along with the US sanctioning of the Arctic LNG 2 project in Russia last week and talking up this as evidence that a tighter market could emerge in the coming months.
