Spot shipping rates for liquefied natural gas moved higher in both the Atlantic and the Pacific, marking the third consecutive week of gains, according to assessments from Spark Commodities. The rise applies to the two basins at the same time, so the firmer trend in freight costs is not confined to a single region. Spark Commodities, which tracks LNG shipping rates, reported the third straight weekly increase.
A run of three weekly increases points to a sustained climb rather than a one-off movement in the freight market. Each of the last three readings has come in above the one before it, in the Atlantic as well as the Pacific. The parallel movement across the two basins suggests the firmer tone in spot LNG freight is broad-based.
Spot freight assessments reflect the cost of hiring a vessel to move a single cargo, as opposed to covering shipping needs through a longer-term charter. Traders, charterers and shipowners follow these readings because they indicate the transportation cost of moving a spot cargo. When the assessments rise for several weeks in a row, the cost of fixing a vessel for a prompt shipment moves up with them.
For companies buying, selling or shipping LNG on the spot market, three straight weeks of higher assessments mean the cost of moving a cargo has been climbing steadily across both basins. Freight is one of the variables that feeds into the delivered cost of a cargo, so a sustained rise in shipping rates is a factor traders and charterers weigh when they price cargoes and plan voyages. Taken together, the assessments indicate that upward pressure on spot LNG freight was still in place in the most recent week.
Source: LNG Prime
