LNG shipping demand rebound expected after summer slump

Demand to ship liquefied natural gas as winter approaches in the biggest-consuming countries is rebounding while few vessels are available, according to RS Platou Markets, a unit of Norway’s largest shipbroker, Bloomberg reports.
Three vessels were reported booked, Herman Hildan, an Oslo-based analyst, said in an e-mailed report yesterday, citing Platou brokers. The increased demand contrasts with last week, when spot rates declined below $100,000 a day, he said.
Rates for one-time cargoes retreated as much as 33% after reaching a record around $150,000 before the summer, according to Platou.
World LNG output shrank 1.6% by the end of July compared with a year earlier, and the typical summer slowdown was amplified by maintenance in Qatar and sabotage at a facility in Yemen, Hildan said. It’s unclear whether rates will resume climbing or stay put, he added.
“Volumes appear to be returning after a longer-than- expected seasonal slowdown,” Hildan said in the report. “The key factor is seasonal demand, mainly driven by weather and temperatures.”
Increasing trade distances lifted rates this year even as volume growth slowed, Platou said in October. Winter demand may widen the price gap between Asia and Europe, leading to longer-distance shipments and higher rates, Arctic Securities said. Prices for the frozen fuel in Asia rose 6% last month, Fotis Giannakoulis, a New York-based analyst at Morgan Stanley, said in a report November 12.
Japan, the largest importer, paid $16.84 per million British thermal units in September, compared with a record $18.07 in July, according to data from LNG Japan Corp Imports rose in November and December in four of the past five years.
LNG is natural gas cooled to minus 160 degrees Celsius (minus 256 degrees Fahrenheit) so that it occupies 600 times less space for transportation.
A pipeline supplying Yemen’s biggest liquefaction plants in Balhaf on the Gulf of Aden was attacked on October 30 for the seventh time in a year, Yemen LNG said a day later.
Qatargas, the world’s biggest producer, shut down two plants with combined capacity to make 15.6mn metric tons a year in September.