LNG shipping stocks: Summer season is near

Summary
The UP World LNG Shipping Index gained 1.17% last week, correcting the previous week’s drop. Of the constituents, the most gained Flex LNG, followed by Golar LNG. Awilco LNG and Japan companies led the drop. With the nearing end of the second quarter, the summer season is close, which will bring positive momentum for LNG shipping stocks.

UPI & SPX
Last week, UPI, which tracks listed LNG shipping companies, gained 1.83 points or 1.17%, closing at 157.27 points. In contrast, the S&P 500 index gained 0.61%. The chart below illustrates this divergence in performance.

Broader view
The early start of the summer season, better said, a spring peak, was followed by a colling we wrote about last week. But with the end of June here, preparation for winter heating will start. Gas consumption might rise now due to the summer heat, especially in Asia. Spark Commodities announced another sign of the coming summer season: the Spark30s Atlantic rates rose by $10.750 to $75.000.

Constituents
Last week, only three companies grew by more than 3%. The most gained Flex LNG (NYSE/OSE: FLNG), which rose by 6.2%. Golar LNG (NASDAQ: GLNG) was the second top gainer after Perenco announced a stake of 9.9% via its affiliate Naria. After this news, the price rose close to the all-time highs made in July 2022. Excelerate Energy (NASDAQ: EE) grew by 3.5%, and its price is building a support ledge between $17-18.

Another group of gainers, around 2%, had slightly more members than the previous named above. Cool Company (NYSE/OSE: CLCO) gained 2.4% but went sideways after the tattered rising attempt. MISC (KLSE: 3816) continued rising with a gain of 2.2%, preparing for the new rising attempt to all-time highs. Exmar (BSE: EXM), BP (NYSE: BP) and Chevron (NYSE: CVX) gained around 1.8% as BP and CVX broke their decline. Same did Shell (NYSE: SHEL), but it gained only 1.4% last week.

Dynagas LNG Partners (NYSE: DLNG) announced the new sale and leaseback of its four LNG carriers with the China Development Bank in a sum up to $477.5m, while the Q4-23 earnings release said the amount would be up to $345 million. Due to the same release, the debt outstanding to December 31, 2023, was $420.6 million. The price of the units rose by 1.3%, averting a decline.
The list of constituents remains mostly Asian companies, and they are the decliners. But the most lost Awilco LNG (OSE: ALNG), as it went ex-dividend on Wednesday. The ex-dividend drop was 11.4%, which was less than the previous dividends. Then, ALNG lost over 16%.
Other losses were much smaller. The Japanese trio consisting of NYK Line (TSE: 9101), Mitsui O.S.K. Lines (TSE: 9104) and „K“ Line (TSE: 9107) lost between 2.3 and 3.7%, as the Nikkei 225 index also lost. Korea Line Corporation (KRX: 005880) dropped by 3.6%.
New Fortress Energy (NASDAQ: NFE) slowed its decline again, but the drop was still 2.6%.

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 18 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