Summary
LNG shipping stocks saw a modest rise last week, with the UP World LNG Shipping Index gaining 1.45%, mirroring the performance of the S&P 500. Despite the overall growth, the market remained subdued due to low trading volumes. The market’s mixed performance highlights ongoing challenges, particularly for companies dealing with low charter rates and expiring contracts.
UPI & SPX
Last week, UPI, which tracks listed LNG shipping companies, gained 2.47 points, or 1.45%, closing at 172.96 points. The S&P 500 index also gained 1.45%. The chart below shows both indices with weekly data.
Broader view
Last week was very calm for LNG shipping stocks, mainly because there was only a low traded volume. Most constituents’ gains or losses start with one or zero.
UPI is growing, yet the situation is not so easy for everyone. As the year-to-date events have shown, low rates are causing problems for those whose contracts have expired or been terminated. This was most recently demonstrated by Awilco LNG, which announced that its WilForce carrier is operating at spot rates: “Spot rates are slowly inching up, which is driving some more activity on multi-month deals with the 1/year TC for TFDEs continue to be quoted around USD 60- 65,000 per day.”
Our UPI TCE index indicates that charter rates of constituents are above $84,000 for the second quarter.
Constituents
The top gainer last week was Exmar NV (BSE: EXM), which saw a 6.3% increase in stock value. However, only 46 thousand shares were traded. Capital Product Partners (NASDAQ: CPLP) experienced a 2.9% increase, while NYK Line (TSE: 9101) saw a 2% gain in stock value.
The chart of EXM indicates that, due to the recent increase, the price closed above the previous range. CPLP began its movement from the support line and moved further into the range, with its price now slightly below the midpoint of the range. The price of NYK Line decreased beyond the resistance and closed just below it.
The rest of the growth was relatively small. Therefore, we selected a few stocks with an interesting candle pattern on the weekly data so our readers could monitor them closely. The first stock is Nakilat (QSE: QGTS), which gained 0.9% and closed above the previous ‘Hammer’ candle on the support line. The second stock is Chevron (NYSE: CVX), which closed slightly higher than the previous day, with a gain of 0.2%. The third stock is Flex LNG (NYSE/OSE: FLNG), which has seen gains for the third consecutive week, possibly due to a close ex-dividend day. While the first two stocks had below-average volume, FLNG had nearly average volume. However, its low volume might indicate accumulation, albeit without a clear breakout yet.
Declines were also relatively mild. Earlier, we mentioned Awilco LNG (OSE: ALNG). Its loss was 5.1%, primarily due to the reduced dividend driven by WilForce’s spot rates. During the Q2 results, ALNG said its TCE for H1 was $121,700 per day. On the other hand, buyers refused to let prices decline below the closing price, causing ALNG to remain stable in the short term.
Korea Line Corporation (KRX: 005880) experienced a 4% loss. As mentioned in an earlier report, this stock is quite volatile and has a broad trading range. Meanwhile, Dynagas LNG Partners (NYSE: DLNG) also experienced a 2.3% loss. However, it is currently trading sideways and is closer to the support line.
New Fortress Energy (NASDAQ: NFE) is currently holding the support line despite a loss of 1.1%. The shadows on the weekly candle indicate that both buyers and sellers are striving to determine the direction of the next trend. The trading volume was above average, and the average was much higher than it was until the beginning of August when NFE lost 15% in one week.
About UPI
UP World LNG Shipping Index, established in 2020, is a rules-based stock index family designed to show and measure the performance of worldwide publicly traded companies involved in the maritime transport of liquefied natural gas (LNG). This unique index covers 19 companies and partnerships worldwide, like the USA, Qatar, Japan, Norway, South Korea, and Malaysia. The index covered over 65% of the world’s LNG carrier fleet in 2020. UP Index is a premium service. We offer freemium (the basic chart of the UP Index and S&P 500 index) and trial access to all charts.
Source: UP-Indices.com