Atlantic Basin LNG front-month charter rates rose by 58% across the month of June, pricing at ~$68k/day for the CME Group LNG Freight U.S. Gulf to Continent contract.
This sharp uptick follows a relatively weak two-month period, which saw front-month charter rates languishing between $40K-45Kk/day across March through -May, despite chokepoints created by transit delays at the Panama Canal and Suez Canal.
Such disruptions would typically lead to a reduction in vessel availability, but a re-configuration of trade flows (more USGC and Qatari cargoes remaining in their respective basins) worked to mitigate this.
The recent rise has been largely spurred by a 7% year-on-year uplift in Asian LNG demand across June, driven by increased Chinese industrial gas usage, and summer cooling demand in South and& South-East Asia regions.
Rising Asian demand against the backdrop of a soft European gas market, where June LNG imports were down 24% year-on-year, has widened JKM-NWM spreads (0.6 $/mmbtu increase across June), thereby increasing the call on Atlantic supply to the Pacific and tying up vessels on lengthier voyages.
Source: Timera Energy
