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LNG vessel rates: Asian diversion of US LNG keep day rates low
Nov 10: If Asian buyers continue to divert their contracted supply from the US towards Europe and Latin America, it will reduce demand for LNG vessels in the long term by cutting down on long-haul trade
8The long term outlook for the LNG industry continues to be bullish and rates are expected to improve substantially from 2018 onwards.
8One of the major reasons for this outlook is the expansion in US LNG supply.
8Since most new LNG export capacity in the US will start to come online from 2018 onwards and almost 85-90% of this supply has been tied to contracts, the trade was expected to create a demand for a large number of vessels.
8However, the LNG market has changed considerably from the time when these contracts were signed and so Asian buyers are looking to offload their contractual supply elsewhere.
8In such a scenario, the demand-supply imbalance will take a longer time to even out.
8Meanwhile, the latest LNG day rates for vessels have come down and have stayed low over the last few weeks.
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