Atlantic, Pacific LNG shipping rates continue to dip on high spot vessel supply
Atlantic and Pacific shipping rates for LNG fell to $40,000/day on high spot vessel supply, marking a $25,000/day fall since early February.
For both basins, the $40,000/day level was last seen in early May 2019.
The ballast rates in the Atlantic and Pacific were assessed by S&P Global Platts at 50% and 75%, respectively, meaning shipowners are no longer fully compensated for the ballasting portion of a spot voyage.
Although the main driver in the fall in charter rates was high spot vessel supply, the cyclical nature of these markets also contributed. This was also highlighted in the month of February 2019, when the Pacific and Atlantic shipping rates also fell $20,000/day and $15,000/day, respectively.
In the Pacific, sentiment was bearish despite the impact of the coronavirus leading to delays in vessel discharge programs in China. This has not impacted the spot shipping market as it was not yet a systemic occurrence. The latest delay reported by Platts was the Maran Gas Coronis, which has been in a holding pattern near Dalian over the last seven days with a cargo loaded from Qalhat around January 24. Five vessel delays and diversions had been previously reported.
In the Pacific, seven to nine cold TFDE tankers were heard available for loading until the second half of March. The Gaslog Singapore, Hoegh Gannet, Hoegh Gallant, Kita LNG, Woodside Donaldson, Hoegh Esperanza and the Wilforce were listed among them. Four cold steam vessels were also heard to be available.
In the Atlantic, five to seven modern vessels were heard available with at least one month charter availability for loading until H2 March. The latest reported fixtures include DGI putting the Wilpride on subjects for a mid-March Cameron load. The day rate heard was around $40,000/day. Before that, Engie took the BW Paris to load in H2 March from Freeport. The day rate heard was mid-$40,000s/day.
Shipping typically accounts for somewhere between 5% and 20% of the delivered price ex-ship of LNG, meaning large movements in rates can have a significant effect on the final price of delivered gas.