The UP World LNG Shipping Index (UPI) recently fell by 2.04%, losing 3.44 points to close at 164.93, while the S&P 500 similarly dropped by 1.53%. Despite European LNG demand holding strong, buoyed by storages being approximately 33% full after winter, Asian LNG sales have seen a downturn, making Europe the primary market. Spot rates for LNG shipping remain low, hovering around $28,000 per day.
Factors such as ongoing debates within the U.S. administration about imposing tariffs have contributed to recent market volatility, resulting in a sharp sell-off of global stocks. In a wider context, Europe’s LNG storage levels indicate a continued filling trend post-winter, whereas Asian markets are struggling with declining sales. A recent report highlighted that Knutsen, partnered with Polish company Orlen, received their fifth and sixth LNG tankers from Hyundai Samho shipyards in Korea.
However, fears regarding the looming tariff situation in the U.S. have overshadowed this news, prompting a negative response in stock markets worldwide. Notably, the UPI again failed to break through its resistance levels, exhibiting a sawtooth pattern indicative of fluctuating intentions. New Fortress Energy experienced the most severe decline among companies, losing over 20% following the announcement of a sale to Excelerate Energy.
Other notable declines included losses for Japanese firms, with “K” Line, NYK Line, and MOL all recording significant drops. Conversely, some companies maintained minor gains, including Flex LNG and Tsakos Energy Navigation, which showed promising increases. Looking ahead, we remain cautiously optimistic despite the present uncertainties created by U.S. policy decisions.
While short-term volatility is anticipated, the long-term demand for LNG, coupled with potential new contracts, gives a positive outlook. Observers should keep an eye on policy changes, competition in the market, and upcoming corporate earnings to gauge future direction.