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LNG freight hits 7-month low below USD 50,000/day

(Montel) Atlantic-basin spot LNG freight rates hit a more than seven month low below USD 50,000 per day, down 65% from the beginning of the year, on lower hub prices and vessel demand, Spark Commodities data showed on Thursday. 

The Atlantic US to Europe LNG roundtrip, known as Spark 30, for April delivery was USD 49,500/day, the first time it dropped below USD 50,000 since the previous low on 10 August 2022 at USD 48,750/day.

Freight prices were tracking gas prices lower, as winter peak demand wanes, with sellers more willing to liberate their vessels, an LNG market source said.

“Less cargo opportunities means it’s less valuable to keep vessels in the portfolio,” the source said.

European LNG prices are hovering around their 20-month lows as they track the Dutch TTF, considered a regional benchmark.

More availability

Additionally, availability is also increasing amid a very tight price spread between European hubs and Asian LNG, prompting ships to stay within their regions, the LNG market source said.

A tighter spread between the two regions means the number of tonne miles at sea also decreases, thus ship availability increases.

The spread between the JKM and TTF was holding in a tight range of less than USD 0.40/MMbtu for most of the remainder of the year.

Freight prices have averaged slightly higher than USD 57,000/day so far in March, up slightly from the USD 55,875/day in February, but significantly lower than the almost USD 86,250/day seen in January. 

They were USD 143,000/day on the first trading day of January, and they hit an all-time high of nearly USD 485,000/day in early November.

Europe has relied on LNG since the start of last year to offset diminishing Russian pipeline supply amid the war in Ukraine and related sanctions from the West.