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LNG Market Snapshot – May 2016

  • The global active LNGC fleet grew by 2 to 427 vessels whilst the order book has contracted to 132 vessels
  • General vessel oversupply and reduced fleet utilisation of c. 86% pushed monthly average spot charter rate down to $23,400/day, below our 12-month target range of $25-35,000/day
  • We expect 42 newbuilds to enter the market this year whilst lay-ups are not keeping pace with idle tonnage
  • Spreads between spot and long-term charter rates narrowed in both basins, reducing room for manoeuvre for ship owners
  • Japan and South Korea are increasingly shifting power capacity back to coal and nuclear, thereby reducing LNG demand since 2014; energy efficiency drive in Japan will help to restrain LNG demand in the future
  • Chinese LNG demand is highly uncertain – the 13th Five-Year-Plan emphasises domestic energy production over imports but gas production targets are ambitious and expensive

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