Record lows see LNG spot prices dip below $7,000 a day

LNG shipping spot rates and time charter rates have fallen to all-time lows, according to research from Joakim Hannisdahl-led Gersemi Asset Management. Dual fuel diesel electric carriers and steam turbine carriers are at or below operating costs, Hannisdahl warned yesterday. 

The average spot rate assessment for a modern two-stroke 174,000 cu m unit fell by 30% last week to $20,250 a day, by far the weakest level on record, according to Clarksons Research, while the equivalent rate for a 145,000 steam turbine vessel fell by 40% last week to just $6,750 a day. The LNG spot market, however, is very small compared to most other shipping sectors – at around 5% of the fleet. 

LNG shipping rates have been under “extreme pressure” since September, according to a new report from investment bank Jefferies. Two-stroke spot assessments have fallen from $70,000 a day to $20,000 a day over the past two months. 

The dire market conditions have seen some owners start to assess scrapping options. Splash reported last week on SK Shipping’s decision to send four steam turbine gas carriers for demolition. 

“With the current market predicament, there may be an accelerated sale of steam turbine tonnage for demolition purposes,” MB Shipbrokers noted in a recent report.