Poten: vessel supply growth expectations weigh on LNG spot charter rates

Poten: vessel supply growth expectations weigh on LNG spot charter rates
Illustration purposes only (Image courtesy of GasLog)

Liquefied natural gas (LNG) spot charter rates could remain low throughout the entire year, largely due to the expectation of growth in future vessel supply, according to a report by the consultancy Poten & Partners.

As the number of active spot market LNG vessels has grown from 37 to 46 since the beginning of the year, largely due to existing vessels coming off term charter, spot charter rates continue to remain low.

It is projected that the number of available vessels will grow to 55 by year-end as existing term charters expire.

However, Poten & Partners note there are signs of a changing market which could result in spot charter rates rising from current levels.

“If charterers rush back to term chartering, existing vessels will be pulled from competing in the spot market and rates should rise,” the report reads.

Over the past few years, more than eight term shipping requirements by charterers have been reduced and delayed on the assumption of continued vessel availability. If global LNG trade continues to grow, the charterers may reverse the course.

During the first quarter, global LNG trade grew by approximately 12 percent year on year. April data shows a continued growth with a possibility of LNG trade volumes reaching 296 million tons. Such trade figures demand 385 vessels, Poten & Partners say.

Compared to a conventional LNG carrier fleet of 405 vessels, it is not a comfortable margin of vessel surplus for most charterers.

Share this article

Follow LNG World News

Events>

<< Feb 2019 >>
MTWTFSS
28 29 30 31 1 2 3
4 5 6 7 8 9 10
11 12 13 14 15 16 17
18 19 20 21 22 23 24
25 26 27 28 1 2 3

Downstream 2019

Renowned as the most significant global meeting place for Downstream professionals…

read more >

2nd CWC Japan LNG & Gas Summit

The highly successful CWC Japan LNG & Gas Summit returns for a second year from 19-20 February 2019 in Tokyo, Japan…

read more >

Global LNG Forum 2019

Global LNG Forum is your opportunity to see what the future of LNG will be like…

read more >

LNG2019

LNG2019 is presented by the IGU, GTI and IIR, supported by the Shanghai Government and hosted by China LNG Association, China Gas Society, The Chinese Association of Refrigeration and China Gas Association.

read more >