LNG shipping stocks: Record highs amid global market volatility and winter preparations

Summary
LNG shipping stocks saw significant gains last week, with the UP World LNG Shipping Index (UPI) reaching an all-time high, driven by positive sentiment in global markets and the onset of winter preparations. Key contributors included Japanese companies like Kawasaki Kishen Kaisha and U.S.-listed firms such as Excelerate Energy and Flex LNG. While some oil and gas drilling companies also experienced modest gains, most declines were minimal. The performance suggests a robust outlook for the LNG shipping sector, bolstered by increased demand for electricity in regions like South Asia.

UPI & SPX
Last week, UPI, which tracks listed LNG shipping companies, gained 9.52 points or 5.91%, closing at 170.49 points. The S&P 500 index gained 3.93%. The chart below shows both indices with weekly data.

Broader view
The UPI is now above 170 points, reaching a new all-time high. Positive sentiment has returned to the global stock markets. However, this is likely a result of increased holiday volatility rather than a complete change in sentiment. Nonetheless, for LNG shipping stocks, the growth is founded on more stable grounds—the beginning of the winter preparation season, driven by increased heat in South Asia, leading to higher electricity consumption.

Constituents
The Japanese trio contributed to the growth, backed by U.S.-listed companies. Kawasaki Kishen Kaisha (TSE: 9107) recorded the most significant gain last week, increasing by 12.6%. Despite this considerable growth, ‘’K’’ Line managed to close the gap from a fall two

According to the charts, Mitsui O.S.K. Lines (TSE: 9104) and Nippon Yusen Kabushiki Kaisha (TSE: 9101) are better positioned. They could resist the selling pressure from a week ago and have continued to rise. Both companies had been trading sideways since the beginning of the year, so after MOL gained 9.1% and NYK Line 10%, both are close to the top of this range.

The majority of the gains were modest, mostly below 5%. The only exception was Excelerate Energy (NASDAQ: EE), which saw an increase of 5.1%. Dynagas LNG Partners (NYSE: DLNG) and Flex LNG (NYSE/OSE: FLNG) experienced similar gains of 4.1% and 4%, respectively. FLNG released its Q2 results, announced a stable $0.75 dividend, and extended debt refinancing beyond 2028.

Awilco LNG (OSE: ALNG) and Tsakos Energy Navigation (NYSE: TSE) also saw similar gains of 3.9% and 3.7%, respectively. ALNG’s performance remained steady, while TEN attempted to avoid pressure, signalling the start of a new downtrend.

Oil and gas drilling companies experienced gains ranging between 1.1% and 2.6%, with each displaying a different mood. Shell (NYSE: SHEL) showed the strongest performance by maintaining a sideways trend. Chevron (NYSE: CVX) and BP (NYSE: BP) worked to maintain the support level, with BP closing the two-week-old “Asian” gap, similar to the actions of ‘’K’’ Line.

MISC Bhd (KLSE: 3816) reached a new high above 8.5 Ringgit at the end of May, the highest price level since 2016.

Other gains were less than 1 per cent. New Fortress Energy (NASDAQ: NFE) attempted to recover from a previous decline but closed at the support line with a gain of 0.4%.

All declines were less than 1.5%, with many less than 1%. SM Korea Line (KRX: 005880) experienced a 1.5% decline. However, it is in a spacious and comfortable range for movement, and it appears poised to raise its price closer to 2.2 Won.

Capital Product Partners (NASDAQ: CPLP) is near its support line and is awaiting its conversion to C-Corp by August 26. The new name will be Capital Clean Energy Carriers Corp. CPLP has also extended the maturity and reduced the financing costs for its three LNG carriers, as announced in the Q2 earnings call.

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