Spot charter rates of modern two-stroke LNG carriers crashed to historic lows at the end of last week, despite a slight uptick in fixture activity.
Brokers said levels for vessels in the Atlantic were down below the $30,000 per day mark, with short-haul voyages pegged at closer to $16,000 per day.
At these numbers, the rates for two-stroke tonnage are closing on those for tri-fuel diesel-electric vessels which are firmly in the teens in the Atlantic and hovering around the $20,000 per day mark in the Pacific.
Brokers said levels for LNG carrier fixing in the Pacific were also falling closer to vessels in the west.
Market players said there continues to be a glut of tonnage due to warmer-than-expected weather and topped-up storage capping demand. But most reference a pervading bearish sentiment through into 2025.
Brokers spoke of the market likely to remain “subdued”, despite a flurry of fixtures last week, with others speaking of charterers being “spoilt for choice” on vessels with some keen to specify on two-stroke engine type.
Hope is being held out that the US presidential election result this week could bring clarity on the permitting pause on new liquefaction projects imposed by the Biden administration in January and encourage more final investment decisions.
But Poten & Partners analysts have previously indicated that they would expect these delays to continue.
There has also been talk of Atlantic spot levels bottoming out for modern vessels and with this a move to forward fixing for 2025 which, while at lower levels, could help improve the market mood.
The rate picture this November — usually one of the months of highest demand and rates for vessels — is in complete contrast to November in the past two years.
In November 2022, rates for two-strokes — which made their first appearances in 2016 — briefly soared to touch the $500,000 per day range and were making headlines at daily levels around the $350,000 mark. This time last year they were hitting just above $250,000 per day.
Tri-fuel diesel-electric and steam turbine vessels were also earning six-figure rates for spot fixtures during 2022 and 2023. Today, both are being quoted at rates below operating expenses.
