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>

<< Nov 2018 >>
MTWTFSS
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 29 30 1 2

The International Gas Cooperation Summit (IGCS)

The Summit will put the objectives of South Africa and the region at the forefront of international gas development…

read more >

LNG Supply, Transport & Storage South Asia Forum 2018

LNG Supply, Transport & Storage South Asia Forum 2018 will address and propagate LNG imports…

read more >

The Nineteenth CWC World LNG Summit & Awards Evening

The CWC World LNG Summit & Awards Evening is recognised as the premier end of year gathering for the global LNG industry.

read more >

LNG India Summit 2018

After three successful editions, LNG Summit is back with yet another edition for chief LNG…

read more >