Argentina Competing for LNG Seen by Platou Curbing Shipping
Low hydropower in South America helped LNG prices there rise to $17.50 per million British thermal units, driving prices in northeast Asia to $19.10, Frode Moerkedal, an Oslo-based analyst at Platou, said in an e-mailed report today, citing figures from Argus Media. That could reduce shipping demand because Argentina is 4,600 nautical miles from Nigeria, compared with a 10,700-mile journey to Japan, according to the report.
Argentina is seeking to import 5.2 million tons of the frozen fuel this year, up from 3.6 million in 2012, according to the investment-banking unit of Norway’s largest shipbroker. If the increase replaces cargoes to Japan, shipping demand would fall 1 percent, cutting rates by $8,000 a day, all else being equal, Platou estimates.
“The reason for the higher spot prices has partly been fierce competition from other regions,” Moerkedal said in the report. “The increased trade within the Atlantic basin may hamper the charter rate development.”
Spot rates for modern LNG carriers increased to $110,000 a day, from $100,000 in December, Moerkedal said in the report, citing brokers he didn’t identify.
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