LNG shipping stocks: Market turbulence affects shippers with mixed results

Summary
Last week, the UP World LNG Shipping Index (UPI) experienced a decline of 2.30%, closing at 160.97 points, while the S&P 500 remained primarily stable. The drop in LNG shipping stocks mirrored a global market downturn, heavily influenced by Japan’s sharp decline early in the week. However, some constituents like Capital Product Partners and Golar LNG showed resilience, posting modest gains. Despite widespread volatility, positive sentiment persisted,
with many stocks experiencing only mild declines. Notably, New Fortress Energy suffered the most, plummeting over 24% due to internal challenges rather than global market factors.

UPI & SPX
Last week, UPI, which tracks listed LNG shipping companies, lost 3.79 points or 2.30%, closing at 160.97 points. The S&P 500 index stayed nearly the same. The chart below shows both indices with weekly data.

Broader view
Japan´s Monday drop continued globally, from Europe to the USA, whereas most of the damage stayed in Japan at the end of the week. However, nearly all constituents suffered a negative opening gap. Some exceptions were from Asia (SM Korea Line Corporation), and some were inert to market moves due to planned company actions (Exmar). During the week, most declines were mild later, which shows positive sentiment. The volatility of all companies was much higher than the final profit or loss.

The total traded volume of UPI constituents was above the average but still not the highest.

Constituents
Despite the global drop, some constituents finished with a positive gain. Naturally, these gains were insignificant, but the context suggests more optimism behind them.
Capital Product Partners (NASDAQ: CPLP) gained the most, 2.3%. This partnership also opened without a gap, and its losses were only intraday. Golar LNG (NASDAQ: GLNG) gained a similar 2.1%, but its open gap was more than -3%. Flex LNG (NYSE/OSE: FLNG) was the third musketeer, with a gain of 1.2%, as it was on support at $25.
Exmar NV (BSE: EXM) and Shell (NYSE: SHEL) stayed more or less on the same levels, as EXM gained 0.5% and SHEL 0.3%

The most dropped stock was New Fortress Energy (NASDAQ: NFE), which lost over 24%. But this was not Japan’s fault. It crashed after Friday´s earnings call, losing 23% in a single day. The main reason was rising debt, followed by a delay in FLNG1 operations. FLNG1 was commenced in July, which triggered FLNG2 financing. A power plant in Nicaragua should begin operations by Q4 2024.

Kawasaki Kisen Kaisha (TSE: 9107) was the second double-digit loser. As its price remained closely above the opening, the loss was 11.4%. The losses of the other two Japanese shipping companies were milder: Mitsui O.S.K. Lines (TSE: 9104) lost 2.8%, and Nippon Yusen Kabushiki Kaisha (TSE: 9101) dropped by 1.5%.

Excelerate Energy (NASDAQ: EE) experienced a 4.9% decrease, forming a Doji Star candle pattern. Meanwhile, Dynagas LNG Partners (NYSE: DLNG) was on the verge of forming a similar pattern but with a larger candle body. The candle’s body was situated at the lower end of April’s range, testing the support line, and DLNG’s decrease was 3.2%.
Korea Line Corporation (KRX: 005880) opened in green but closed with a 5.1% loss. As this is a very volatile stock, the last week’s move looks natural.

BP (NYSE: BP) and Chevron (NYSE: CVX) did the same, losing 2.4%. As CVX stopped at the support line, BP closed below the 2024 range, making a new year´s low. On the other hand, the body of BP´s candle is green, and the body of the CVX candle is red. MISC Bhd (KLSE: 3816) lost 1.7% and went sideways at the end of the week. Tsakos Energy Navigation (NYSE: TEN) closed last week with a loss of 1.6% with a green candle. Nakilat (QSE: QGTS) remained impassive to the sell-off and lost just 1.4%.

About UPI
Established in 2020, the UP World LNG Shipping Index is a rules-based stock index family designed to measure the performance of worldwide publicly traded companies involved in the maritime transport of liquefied natural gas (LNG). This unique index covers 19 companies and partnerships worldwide, representing over 65% of the world’s LNG carrier fleet in 2020. The UP Index offers premium services with freemium and trial access to charts.
Source: By Tomas Novotny, UP-Indices.com