World News
LNG Shipping Rates To Fall
Shipping rates for liquefied natural gas (LNG) may be on the decline as demand for winter fuel falls, Bloomberg reports, citing information from investment bank Arctic Securities ASA.
However, the gap between the prices of the fuel in Europe and Asia has risen, making it profitable to move cargoes east.
Spot rates held steady this week compared to last at $126,000 a day, while the Asian premium for the fuel rose to $9 per million British thermal units (btu).
"It seems that the sentiment is somewhat softer at present," said Erik Nikolai Stavseth, an analyst at Arctic Securities, said in a report.
Stavseth said arbitrages, where investors take advantage of price differences, may not be enough to counteract current levels of supply and demand.
"While high arbs could support rates, we find that rates could slide as we move out of what seems like an extremely tight winter market from a volume perspective."
Some in the industry, including listed LNG shipping company Hoegh LNG AS [HLNG:Oslo], have predicted that the market for transportation of the fuel may have a glut of tankers in the near term, until new natural gas projects come online in a few years.
Key Bunker Prices More
| VLSFO | MGO | |||
|---|---|---|---|---|
| $/mt | +/- | $/mt | +/- | |
| Singapore | 502.00 | 7.00 | 617.00 | 6.00 |
| Rotterdam | 455.00 | 8.00 | 619.50 | 4.00 |
| Houston | 467.00 | 4.50 | 625.00 | 2.50 |
| Fujairah | 495.00 | 6.00 | 712.50 | 1.50 |
| Global 20 Ports Average | 524.50 | 4.50 | 710.50 | 4.00 |
| Global 4 Ports Average | 479.50 | 6.50 | 643.50 | 3.50 |
| Global Average Bunker Price | 570.50 | 2.00 | 747.50 | 5.50 |
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