Summary
The UP World LNG Shipping Index, which tracks listed LNG shipping companies, gained 3.64 points (2.15%), closing at 173.18 points, while the S&P 500 index lost 0.38%. UPI broke through the 172-point resistance level on its first attempt and is now approaching its all-time high of 176.15 points set in September 2024. All but four companies rose, with a median gain of 2.76% and above-average volume. Spot rates continue to fall sharply, with Atlantic rates down $21,000 to $26,250 and Pacific rates down $3,000 to $41,250, according to Spark Commodities.
New Fortress Energy and COSCO Shipping Energy Transportation achieved double-digit growth at 20.34% and 10.39%, respectively. Excelerate Energy rose 9.16%, setting a new all-time high. On the downside, only Japanese companies lost ground, with Mitsui O.S.K. Lines falling 3.62%, K Line dropping 3.59%, and NYK Line losing 2.35%. Geopolitical events continue to destabilise markets, but if spot rates rise again, as we expect, it will be positive for the shippers. Our long-term outlook remains positive.
UPI & SPX
The UP World LNG Shipping Index, which tracks listed LNG shipping companies, gained 3.64 points (2.15%), closing at 173.18 points, while the S&P 500 index lost 0.38%. The chart below illustrates the performance of both indices with weekly data.
Broader View
The UPI continues to rise and is approaching its highest level of 176.15 points, set in September 2024. More than that, the UPI broke through the 172-point resistance level on its first attempt!
All but four companies rose, with a median gain of 2.76% and above-average volume. Two companies achieved double-digit growth, and others were not far behind.
Spot rates continue to fall. According to Spark Commodities, rates for the Atlantic route fell by $21,000 to $26,250, while rates for the Pacific route fell by $3,000 to $41,250.
Geopolitical events stemming from Russia, Iran, and the US continue to destabilise stock markets and international trade.
Constituents
New Fortress Energy (NYQ: NFE) and COSCO Shipping Energy Transportation (SS: 600026) achieved double-digit growth, with NFE up 20.34% and COSCO up 10.39%. While NFE is now moving sideways, COSCO broke through resistance and closed above it.
Excelerate Energy (NYQ: EE) also improved by almost 10%, rising 9.16% and setting a new all-time high on above-average volume.
Capital Clean Energy Carriers (NYQ: CCEC) rose 6.7% to just below its resistance level after two weeks of decline, on below-average volume. If it attempts to continue upward, volume should increase.
Shell (NYSE: SHEL) rose 4.83%, but this growth only brought the price back to the sideways range from which it had fallen the week before last. Even so, it has not yet erased the previous decline.
Two European UPI components listed in the US, Dynagas LNG Partners (NYSE: DLNG) and Flex LNG (NYSE: FLNG), also rose by around 4%. DLNG rose by 4.29% and FLNG by 3.99%. During the week, DLNG reached significantly higher levels, peaking at $4.18, but the price was pushed back below the previous two highest levels. The situation was similar for FLNG, which also approached the highest prices of the sideways trend, but here the pullback was not as significant, and the price remains just below resistance. The volume of both was above average.
Korea Line Corporation (KRX: 005880, +3.64%) and BP (NYSE: BP, +3.18%) grew by over three per cent. Both remain in a sideways range.
Three companies grew by around 2.5%: Awilco LNG (OSE: ALNG, +2.76%), Nakilat (QSE: QGTS, +2.61%) and Chevron (NYSE: CVX, +2.56%). Neither Nakilat nor Chevron managed to stay above resistance, while Awilco continues its sideways trend.
Tsakos Energy Navigation (NYSE: TEN) is in a similar situation to Nakilat and Chevron, rising 1.47% overall and breaking above resistance this week. However, it remains below it.
Golar LNG (NYQ: GLNG) has maintained its cautious growth of 1.7% above resistance for the second week in a row, though there have been attempts at both declines and greater growth. The outcome is still undecided, but it appears to be gathering strength for greater growth.
Adnoc Logistics & Services (ADX: ADNOCLS) recovered from its previous decline and has since moved sideways, with growth of 1.47%.
And yet another unsuccessful attempt to move above resistance, remaining just below it. This was demonstrated by MISC (KLSE: 3816). Although the candle on the weekly chart is green, the percentage gain is zero.
Only Japanese companies lost ground, erasing their three-week growth streak. Mitsui O.S.K. Lines (TSE: 9104) fell 3.62%, “K” Line (TSE: 9107) declined 3.59%, and NYK Line (TSE: 9101) fell 2.35%.
Crystal Ball
UPI gained from the support area and moved towards resistance in a sideways market. The increased volatility persists, with weather, natural gas prices, quarterly earnings, and geopolitical events being the key factors over the next few weeks. If spot rates rise again, as we expect, it will be positive for the shippers.
Our outlook remains positive in the long term. Rising spot rates, the scrapping of steam vessels, and new liquefaction capacities push the sector higher.
About UPI
Established in 2020, the UP World LNG Shipping Index is a rules-based stock index family designed to measure the performance of publicly traded companies worldwide involved in the maritime transportation of liquefied natural gas (LNG). This unique index covers 21 companies and partnerships worldwide, representing over 65% of the world’s LNG carrier fleet in 2020. The UP Index provides premium services, offering freemium and trial access to charts. With Freemium, users can access the basic UPI vs. S&P 500 chart after completing an email registration. The trial includes full access for fourteen days.
Final Note
This report primarily relies on technical analysis using weekly data.