The dire start to the year for LNG carriers has hit new low benchmarks with some ship types now in negative territory in the Atlantic basin.
Spark Commodities, which tracks LNG rates, is reporting 160,000 cu m TFDE vessels were assessed at minus $2,250 per day at the end of last week, a negative round trip LNG freight rate. More standard 174,000 cu m tonnage was assessed a $3,500 a day, also a record low.
“As a result of record low rates, many market participants are looking at ways to optimise their operations, however it remains unclear whether these optimisations will be sufficient to absorb the surplus of modern 2-stroke vessels expected to remain open in the Atlantic over the next two months, especially as Europe’s demand for gas continues to draw Atlantic cargoes inward,” Clarksons Research noted in its latest weekly report.
Denmark’s MB Shipbrokers suggested spot rates have now hit “rock bottom” while many brokers have listed an increasingly number of ageing gas tankers heading for demolition in South Asia.
Looking ahead, broker SSY noted in a market outlook the LNG shipping market fundamentals appear bearish despite a ramp-up in production from under construction projects expected this year and next as over 150 newbuildings are expected to be delivered.