Could LNG shipping spot rates hit $250,000/day?

Spot day charter rates for LNG carriers have hit their highest levels since mid-2012 on the back of low prompt availability of vessels in both the Atlantic and Pacific basins. This week, S&P Global Platts assessed Pacific and Atlantic day rates for LNG vessels at $140,000/day and $130,000/day, respectively, up 40% since mid-September, and nearly 3.5 times higher than a year ago when rates were still around $40,000/day. The surge in rates indicates that LNG supply is growing faster than new ships are being delivered. The year 2018 will see the largest number of newbuild LNG carriers added to the global fleet, taking it well past the 500 mark. Shipping typically accounts for 5%-20% of the delivered LNG price ex-ship, meaning big moves in rates can have a significant effect on the final price of gas, and the ability of traders to arbitrage LNG cargoes between regions. Day rates first broke the 6-figure level around mid-September. Multiple shipping sources said no ships were available from independent ship-owners across both basins with chartering opportunities focused on relets from portfolio players or traders. In the Pacific region, a spot charter for mid-November was reportedly north of $160,000/day, and several multi-month charters in… continue reading

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Source: CTRM Center

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