LNG Market Snapshot – October 2016

The global LNGC fleet grew by 4 vessels to 432 whilst the order book shrunk from 133 to 129 vessels due to the continuous lack of new orders
Despite a short burst of activity in September, the charter market remains oversupplied, with fleet utilisation below 90%
Two mid-term charters for above $70,000/day from 2018 with Total and BG as well as an uptick in trading lifted the monthly average spot charter rate to $28,550/day, well within our 12-month target range of $25-35,000/day
Steam-powered LNGCs struggle to improve their charter rate prospects in light of oversupply of newer DFDE/TFDE competitors
Far Eastern LNG market is saturated with Japan and South Korea returning to nuclear but spot trading opportunities can emerge due to nuclear outages
Emerging buyers such as India and China demonstrate significant potential but are also particularly price conscious
China’s long-term energy objectives cannot easily be assessed through import capacity expansions alone – national geostrategy, energy supply diversification and local government objectives are at least as significant

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