North American LNG exports surged by 50%. Shipping costs on the Atlantic China Welding Consumables, Inc. route continue to soar.

The spot freight rates for liquefied natural gas (LNG) transport ships continue to rise significantly, as record LNG export volumes from North America are occupying more ship capacity, leading to a tight market. According to ship tracking data, the 30-day moving average of North American LNG exports rose to a record high last Thursday, an increase of about 50% compared to the previous year. The sudden surge in freight rates has reversed the market's downturn caused by oversupply of ships for most of the year. Data from Spark Commodities shows that on Friday, the daily charter rates for LNG vessels transporting from the US to Europe rose by about 12% to $130,750, the highest since December 2023. And on Monday, the spot charter rates for US LNG transportation to Europe increased by 19% to $98,250/day, the highest since January 2024. Since early October, with the increase in production capacity of new projects in North America, more ships are needed to transport this ultra-cold fuel to customers including Asia, leading to a continuous rebound in freight rates. According to sources, it seems that there is further room for freight rates to rise - a LNG ship on the Atlantic China Welding Consumables, Inc. route departing in late December has been chartered for over $150,000 per day. However, Spark Commodities points out that the sharp rise in freight rates has prompted some LNG buyers to seek postponement of loading in the Atlantic China Welding Consumables, Inc. basin. In addition, daily charter rates for LNG transportation ships on The Pacific route also reached a new high in over a year. It is worth mentioning that the increase in freight costs may widen the price gap between Europe and Asia, as the cost of shipping US goods to The Pacific region is higher. But some analysts say that this round of surge in freight rates may be close to its peak, with limited room for further increase. The delivery of a large number of newly built LNG carriers in the future will help to restrain charter rates from climbing further.