Shipping: LNG Freight Rates Have Doubled Since the End Of August

Don't say you weren't warned (or touted, your call). See below.

From MarineLink, October 23:

Headline rates for shipping liquefied natural gas (LNG) in Pacific and Atlantic basins stand at around $140,000 to $150,000 a day for a 160,000 cubic meter LNG tri-fuel diesel electric (TFDE) vessel, brokers say.

That is a 6-year high and compares to Atlantic basin rates of $75,000 at the end of August and around $95,000 at the end of September.

Rates have jumped due to supply from new plants, longer distances traveled and anticipation of higher prices prompting shippers to lock in longer-duration contracts.

"Charterers continue to lock in multi-month contracts ahead of the winter and we continue to believe LNG shipping rates will remain strong due to very attractive supply/demand fundamentals in the coming quarters," Jefferies said this week...MORE

The story mentions rumors of an Asian (I think Japanese) charter at $200,000 per day.
Commodity Trade Risk Management Center has a post from a few days ago that asks:

Could LNG shipping spot rates hit $250,000/day?
Published 19 October 2018

Spot day charter rates for LNG carriers have hit their highest levels since mid-2012 on the back of low prompt availability of vessels in both the Atlantic and Pacific basins.

This week, S&P Global Platts assessed Pacific and Atlantic day rates for LNG vessels at $140,000/day and $130,000/day, respectively, up 40% since mid-September, and nearly 3.5 times higher than a year ago when rates were still around $40,000/day.

The surge in rates indicates that LNG supply is growing faster than new ships are being delivered. The year 2018 will see the largest number of newbuild LNG carriers added to the global fleet, taking it well past the 500 mark.

Shipping typically accounts for 5%-20% of the delivered LNG price ex-ship, meaning big moves in rates can have a significant effect on the final price of gas, and the ability of traders to arbitrage LNG cargoes between regions.

Day rates first broke the 6-figure level around mid-September. Multiple shipping sources said no ships were available from independent ship-owners across both basins with chartering opportunities focused on relets from portfolio players or traders.

In the Pacific region, a spot charter for mid-November was reportedly north of $160,000/day, and several multi-month charters in the low-$100,000s/day.

“What we are about to witness in LNG shipping has only happened twice since 2008 with great magnitude,” Nicolay Dyvik, shipping research analyst at DNB Markets, said, adding that LNG freight rates could rise as much as $250,000/day if markets get tighter....MORE

I say touted because we've been pitching this action since Teekay's Eduard Toll made its historic Russia run last January despite the 1.8 meter (5.9 foot thick) ice.
Some of the recent posts:
Oct. 11 
Shipping: Norway's Flex LNG to Buy Five New LNG Tankers at $180 Million Per (FLNG:NO)

Oct. 10
Shipping/Natural Gas: "China Blinks First In LNG Face-Off With U.S."

We will be back with equities in a few hours but for now natural gas.
As we've mentioned over the past few months the LNG carriers are one of the few shipping lines that can get away with naming their own price. No idea how long it lasts, ships are under construction right now,* but for the moment they are making money,
Sept. 28
Shipping: Price To Ship LNG Spiked and Will Remain High Through 2019

And many more. Use the 'search blog' box if interested.