LNG Freight Rates Plunge to Record-Low Levels as Vessels Pile up

(Bloomberg) -- Liquefied natural gas shipping costs are plummeting as the market grapples with a glut of vessels, a development that could provide relief for gas importers and help pad profits for traders.  

The cost to hire a modern tanker with 174,000-cubic-meters of capacity in the Atlantic Basin fell to $9,750 per day on Thursday, down about 59% from a month earlier, according to data from Spark Commodities. This is the lowest rate on record for a vessel in that category.

The move down “has largely been driven by increased vessel availability, due to the increased influx of newbuilds entering the market,” said Qasim Afghan, a commercial analyst at Spark Commodities. The delivery of new ships are coming faster than additional export projects, which are grappling with delays.

Furthermore, more US LNG shipments have been incentivized to deliver to Europe, thus keeping more vessels in the Atlantic basin, Afghan added.

READ: LNG Tanker Glut Softens Blow to Consumers Facing High Gas Prices

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