Headline timecharter rates continued to firm slightly this week, according to broking sources.
As of 19th August, East of Suez rates were calculated at around $35,000 per day, west of Suez at $40,000, while the 12-month timecharter level was static at $44,000 per day on average.
Kristen Holmquist, Poten and Partners Short Term Forecasting head, thought that US LNG export volumes will increase in the next couple of months.
Speaking at a webinar, she said that the weather and economic activity would play a major part in determining the direction LNG would take going forward.
She said that September cargo cancellations were running at a much lower level than those seen for the past two to three months, giving rise to optimism.
However, she thought that the current storage levels would remain quite high going into 2021. European storage would not return to near normality until 2022.
India is seeing a strong rebound in demand and is forecast to import around 28 mill tonnes of LNG by 2022, while both Bangladesh and Pakistan were also experiencing huge growth.
In the US, she expected a ‘long’ market next year, due to excess supply, saying that it will take the exporters a long time to return to normal.
LNGC rates were forecast to stay soft not varying much from an average of $40,000 per day through November 2022 for a standard 160,000 cu m vessel.
Floating storage levels will remain high heading into this Autumn, meaning that these cargoes will be vying with fresh supplies to find a home, leading to lower spot prices out of the US.
If another lockdown scenario occurred this Autumn worldwide, this would be catastrophic for the LNG sector and for the worlds industrial sector as a whole.
However, Holmquist thought that the 2021 downside risks mainly lay in the world’s economic recovery not being as robust as forecast.
Finally, she said that the economies should hope for a ‘U’- shaped recovery pattern going forward.
