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According to Shipping Tribune, ship brokerage firm Howe Robinson Partners released a report stating that, affected by intensive newbuilding deliveries and the accelerated phase-out of steam turbine ships, the current LNG carrier market is showing a divergent pattern of “weak spot market, stable long-term charters”. Despite the arrival of the traditional peak season, the recovery of spot chartering activity is weak, and charter rates are under significant pressure.
The report analysis indicates that the continued restrictions on Panama Canal transit and high transit costs are forcing the vast majority of LNG carriers to opt for the Cape of Good Hope route. This not only lengthens voyage times but also increases operating costs, thereby suppressing any summer recovery in spot market activity.
Howe Robinson Partners pointed out that due to European inventories exceeding 80%, narrowing arbitrage opportunities, and a lengthy list of vessels available for charter, chartering activity in the third quarter only saw a moderate recovery.
Data shows that as of September this year, charter rates for all vessel types have declined: spot rates for Tri-Fuel Diesel Electric (TFDE) propulsion vessels have fallen to the mid-$15,000s per day, rates for two-stroke propulsion vessels have retreated to the high-$20,000s per day, while a large number of steam turbine LNG carriers remain idle. It is reported that the time charter demand for steam turbine LNG carriers is mainly reflected in niche markets such as the Former Soviet Union /redeployment of Floating Storage and Regasification Units (FSRUs), which has not attracted significant attention.
In the time charter market, widespread bearish sentiment among charterers regarding the short-term market has led to delays in winter charter inquiries. Specifically, short-term rates have corrected sharply; one-year time charter rates for two-stroke vessels dropped from around $50,000 per day in July to the mid-$30,000s per day by the end of September. Long-term rates, however, have shown strong resilience; daily rates for modern two-stroke LNG carriers on five to ten-year charters remain firm at high levels of $78,000 to $80,000 per day, while five-year rates for Tri-Fuel Diesel Electric (TFDE) vessels hover between $55,000 and $60,000 per day.
From the supply side, market signals clearly point to greater delivery pressure in the future. Data shows that nine conventional LNG carrier orders were added in the third quarter, while five steam turbine vessels were scrapped. If this trend of replacing old with new continues, it will help mitigate future oversupply. The institution estimates that by 2028, there will still be 29 “unchartered” vessels in the market. If final demand falls short of expectations, this will significantly increase the downside risk for vessel utilization rates.
According to Howe Robinson Partners, vessels scheduled for delivery from September to December 2025 will mainly include LNG carriers associated with QatarEnergy, Venture Global, Petronas, Cheniere, and Shell.
From the perspective of global trade flows, the strong growth in US LNG exports in the first three quarters of this year has been the main market driver, further deepening Europe’s import dependence. Meanwhile, multiple factors such as cyclones and production line retirements in Australia, maintenance work in Norway, and sustained low pipeline gas deliveries from Russia to Europe have collectively created development space for US LNG.
Although China maintained its position as the world’s largest importer in the third quarter with imports of approximately 17.3 million tonnes, its full-year 2025 import volume is expected to decline year-on-year due to factors including increased domestic natural gas production and trade tariff frictions.
Howe Robinson Partners remains cautious about the short-term development of the LNG carrier market, expecting pressure in the spot market to persist at least until early winter. Future market trends will highly depend on weather factors and unforeseen events. The Atlantic basin, benefiting from support from US cargoes, may see more stable inquiries, while the market east of Suez needs an expansion of the spread between the JKM (Platts Japan Korea Marker) and the European TTF (Title Transfer Facility) price to boost weak demand.
