Gulf Coast LNG freight rates have fallen to its lowest levels since August as a lack of demand, extended voyages around the Cape of Good Hope and Europe's LNG reserves are at record highs.
Platts assessed the region's LNG freight rate to Northwest Europe and Japan/Korea at $1.27/MMBtu and $2.77/MMBtu, respectively, on Dec. 20. This freight rate to Northwest Europe fell 9 cents/MMbtu on that day putting it at the lowest since Aug. 31. The rate to Japan/Korea fell by 18 cents/MMBtu to put levels at their lowest since Aug. 15.
The market points to the current lack of economic opportunities, as well as stagnant demand, weighing on freight rates.
Sources suggest the spot market for December has remained relatively depressed compared to previous years.
Despite delays at the Panama Canal, high inventories and milder weather has depressed demand. Constraints at the Suez Canal have also caused companies to redirect vessels toward the Cape of Good Hope.
However, Gulf Coast freight rate to Japan/Korea via the Cape of Good Hope was assessed at $4.10/MMbtu on Dec. 20, down 29 cents/MMBtu on that day and the lowest since Aug. 15.
While taking the longer voyages around the Cape may create additional demand for shipping, spot demand remains mostly weak as the market hangs in limbo for the holidays. (Hellenic Shipping 12/23/23) US Gulf Coast LNG freight rates sink to multi-month lows | Hellenic Shipping News Worldwide
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