Atlantic LNG: Spot charter rates ease from highs

Prompt spot charter rates for late January-February slid from recent highs on Friday, as northeast Asian near-curve prices fell for the second consecutive day.

The Argus-assessed ARV3 prompt round voyage rate — for tri-fuel diesel-electric (TFDE) carriers fixed for US to northeast Asia journeys — fell to $248,000/d from around $290,000/d a day earlier, while the ARV2 prompt rate, for TFDE journeys from US to northwest Europe, also dropped to $226,000/d from around $267,000/d.

Prompt rates rose sharply a week earlier, following a number of fixtures and requirements in the Atlantic basin for early February, with late-February tonnage demand also holding strong, as northeast Asian near-curve delivered prices continued to post strong gains through early January.

But as this delivered price rally peaked on Wednesday, with late February-March prices subsequently posting significant losses in the following two days, demand within the Atlantic to secure vessels to load February cargoes from the US and deliver into northeast Asia a month later has fallen back.

And the sharp rise in rates a week earlier spurred an increase in Atlantic vessel availability, market participants noted, helping to meet the limited but firm prompt loading demand from firms needing to secure vessels to load cargoes in February, with ensuing fixtures done at lower rates than were heard a week earlier.

Spot charter rates for TFDE carriers for March also retreated on Friday, having risen with the jump in prompt rates a week earlier. The sharp backwardation in northeast Asian near-curve prices has suggested that Europe would offer better returns for firms seeking to market US March loadings, compared with northeast Asia, weighing on tonnage demand expectations for March.

And though March requirements have held quick in recent weeks, offers had been slow, market participants said, with few owners willing to seek employment for the period in case strong prompt northeast Asian demand supported delivered prices to the region further along the curve. Awilco chartered its 156,000m³ Wilpride TFDE carrier on a two-month charter starting in mid-February for around $10.4mn — equivalent to around $175,000/d on a 59-day charter period.

But owners and firms seeking to sublet spare shipping length have begun to offer these vessels to meet the evident March vessel demand, as northeast Asian April des prices failed to rise, and prompt des prices slid. Spanish utility Naturgy was heard to receive a spate of offers for an early March requirement for a carrier to load in the US in early March in recent days, having initially received no offers.