Transportation rates for LNG (liquefied natural gas) increased dramatically last week, with all three Baltic LNG reference routes ending with price increases. This rise was driven by improved chartering activities and expectations of seasonal demand, which bolstered market sentiment.
Rate Increases on Export Routes
Transportation rates on export routes from the Gulf of the United States were particularly stronger than in other regions. For example, the rate for BLNG1 rose from $28,050 per day at the beginning of the week to $33,200 per day by Friday. Meanwhile, the rate for BLNG2 increased from $24,700 per day to $32,400 per day. The largest increase was recorded on the BLNG3 route, which rose from $51,900 per day to $66,000 per day.
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Market sentiment has clearly improved, and activities are particularly noticeable in the Atlantic basin. Gas demand in winter continues to support this trend, as Europe and Asia strive to increase LNG supplies ahead of the summer season. Strong flows from the United States and healthy production levels from alternative export regions also help maintain cargo inventories and trading opportunities.
Periodic Rate Analysis
Periodic rate analyses indicate that the six-month assessment has decreased to $42,500 per day, reflecting caution regarding short-term market outlooks. Meanwhile, one-year and three-year assessments have increased to $55,167 per day and $73,000 per day, respectively, indicating ongoing confidence in the fundamentals of LNG transportation in the long term.
The LPG market also strengthened this week, with transportation rates particularly rising in the Gulf of the United States. A reduction in vessel inventories and profitable short-term charters in the Middle East led to rate increases. For example, on the BLPG1 route between Ras Tanura and Chiba, the rate remained steady this week at $242, while TCE earnings increased from $231,500 per day to $234,700 per day.
On the BLPG2 route from Houston to Flushing, the rate increased to $174. Additionally, TCE earnings rose by $5,300 per day to $202,700 per day. Finally, the rate for BLPG3 from Houston to Chiba increased by $3.29 to $324, and TCE earnings rose by $5,700 per day to $199,200 per day.
