Drewry: Uncertain Outlook in the Near Term

June saw more enquiries than May, and more were converted into fixtures, but Drewry’s LNG freight index was stubbornly unchanged according to the latest LNG Insight.

However, market sentiment remains positive as Cheniere took three vessels on mid-term charter, plus options. One vessel from Dynacom was also added to the first of the two ME-GI ships from Teekay, while Inpext also announced  newbuildings for Ichthys.

But sentiments were less positive in Africa, where the Nigerian Maritime Administration blocked ship movements from the Bonny Channel as its relationship with Nigeria LNG became even more tense.

African supply has already suffered as North African suppliers have been facing feedstock problems. The latest force majeure on NLNG could curtail as much as one cargo every day, if we go by what the terminal exported in 2012.

Although Angola LNG has been commissioned, it will soon go on a planned maintenance shortly and is in no position to fill in the vacuum left by the absence of Nigerian LNG. Technical problems also closed Pluto LNG for a few days during early July, delaying about 200,000 tonnes of cargo.

Rising fleet supply coupled with such unplanned obstructions could lead to diminished trade and lower charter rates in the very short term.

Drewry, July 19, 2013