LNG Carrier Rates Plummet to Record Lows in the Atlantic

The difficult start to the year for LNG carriers has reached new lows, with some ship types now experiencing negative earnings in the Atlantic basin.

According to Spark Commodities, which tracks LNG freight rates, 160,000 cu m TFDE vessels were assessed at minus $2,250 per day at the end of last week, marking a negative round-trip LNG freight rate. Meanwhile, more conventional 174,000 cu m tonnage was assessed at $3,500 per 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 indicated that spot rates have now hit "rock bottom," while many brokers have observed a growing number of older gas tankers being scrapped in South Asia.

Looking ahead, broker SSY highlighted in its market outlook that the LNG shipping market fundamentals remain bearish. This comes despite an expected increase in production from ongoing construction projects this year and next, as more than 150 new LNG carriers are set to be delivered.