The UP World LNG Shipping Index (UPI) posted a moderate gain of 2.29%, rising by 3.57 points to close at 159.60, while the broader S&P 500 index outpaced it with a 4.59% gain. The LNG shipping sector continued to navigate redirected trade flows caused by US-China tariffs, with US gas increasingly heading to Europe and China leaning on non-US suppliers. In Asia, high spot prices have tempered Chinese and Indian demand, leaving South Korea as the primary spot buyer. European gas demand has begun its seasonal decline, though concerns persist over storage for the coming summer. Japan’s “K” Line led growth within the UPI with a 7% gain, joined by solid performances from NYK Line, Mitsui O.S.K. Lines, Golar LNG, and Capital Clean Energy Carriers. Most other constituents posted modest rises, while New Fortress Energy stood out as the sole significant decliner, falling by 3%.
UPI & SPX
The UP World LNG Shipping Index, which tracks listed LNG shipping companies, gained 3.57 points (2.29%), closing at 159.60 points, while the S&P 500 index gained by 4.59%. The chart below illustrates the performance of both indices with weekly data.
Broader view
The LNG market continues to cope with US-China tariffs, after which flows are redirected. US gas will go more to Europe, and China will rely on non-US suppliers.
Reuters in its Global LNG report provides the following detail on Asian trading: “There are limited buyers for prompt cargoes, with Chinese and Indian importers taking a back seat as prices are above $/mmBtu, said Argus head of LNG pricing Martin S., adding that South Korea is currently the main spot buyer in Asia.” And to the situation in Europe: “While Europe’s gas demand has started to fall due to a seasonal trend, concerns surrounding storage injections for summer remain, said Florence Schmit, energy strategist at Rabobank London.”
Constituents
The UPI experienced a quiet growth week with no sudden reversals. All moves were single-digit, and upward ones prevailed. However, the volume traded was below average.
Japan’s “K” Line (TSE: 9107) posted the biggest gain, at seven per cent. Japan’s other two companies, NYK Line (TSE: 9101) and Mitsui O.S.K. Lines (TSE: 9104), rose 5.1 and 4.1 per cent, respectively. All three have flattened the Trump shock decline and are back in rank at the lower end of support.
Golar LNG (NYQ: GLNG) and Capital Clean Energy Carriers (NYQ: CCEC) also gained over five per cent, surpassing the aforementioned five per cent mark by seven and two-tenths per cent, respectively. While GLNG is back on an uptrend, CCEC is still a few points short of a comeback.
Tsakos Energy Navigation (NYQ: TEN) is also back above support after a four per cent rise, hoping for more upside.
BP (NYQ: BP) and Awilco LNG (OSE: ALNG), up about 3%, were separating themselves from the rest of the UPI companies. The rest of the companies were at most one per cent, and more around zero.
On the negative end of the spectrum was the lone New Fortress Energy (NYQ: NFE), which lost three per cent and continues to stabilise after a decline.
Crystal Ball
Despite the growing global uncertainty caused by the US administration, our outlook remains cautiously optimistic. However, we expect increased volatility in the coming weeks. LNG spot rates stayed low, but the impact remains marginal for most UPI constituents. The market is watching for potential breakouts at key resistance levels, which could determine the next price direction.
Our outlook remains steadfastly positive in the long term. The burgeoning demand for LNG, bolstered by situational or management-driven actions and the potential for new long-term contracts, paints a promising picture. Investors should watch policy developments, market competition, and upcoming corporate earnings for further direction.
Source: By Tomas Novotny,
