Summary
The UP World LNG Shipping Index fell 1.05% to 160.72 points, reaching its long-term support level. The S&P 500 gained 0.31%, continuing the divergence between broader markets and LNG shipping stocks. Trading volume hit a record high, signalling strong investor engagement at this crucial technical level.
New Fortress Energy led gains with a 29% surge, while Korea Line Corporation jumped 14% on very high volume, breaking out of its summer sideways range. On the downside, COSCO Shipping Energy Transportation fell 5.3% to support levels. Natural gas prices continue to diverge: Asian JKM declined to $10.66/mmBtu—near the threshold that attracts smaller buyers—while Henry Hub surpassed $5/mmBtu. Despite fundamentals remaining robust, with Atlantic spot rates at $130,000/day, most companies now stand on the cusp of change, testing support levels that will determine the sector’s next direction.
UPI & SPX
The UP World LNG Shipping Index, which tracks listed LNG shipping companies, lost 1.70 points (1.05%), closing at 160.72 points, while the S&P 500 index gained 0.31%. The chart below illustrates the performance of both indices with weekly data.
Broader View
UPI has reached its long-term support level, similar to the end of 2023, when growth in the final weeks of the year pushed the index into positive territory. We will discuss this topic in more detail in the Chart of the Week on our website.
The price of natural gas for Asia is declining slowly, while it is declining more rapidly for Europe. This is due to warmer weather. Interestingly, the price of US gas (Henry Hub) is rising and has surpassed $5 per mmBtu. The price of January deliveries to Asia dropped from $10.90/mmBtu to $10.66/mmBtu, which, according to Argus Media, is close to the threshold that attracts smaller Asian buyers. According to S&P Global Energy, the daily reference price for January deliveries to Western Europe (NWM), based on ex-ship (DES), is $8.787/mmBtu, representing a $0.45/mmBtu discount compared to the price at the TTF hub. Daily spot prices for LNG tankers remain at $130,000 for the Atlantic and $87,500 for the Pacific, according to Spark Commodities.
The declining price of gas will boost demand, but shipping company shares are dropping. One reason is the limited influence of spot rates on fleets mainly operating under long-term contracts.
The ratio of declining to rising companies from UPI was 12:9, with a median movement of -0.26%. Trading volume reached a record high.
Constituents
The declines were not significant, remaining below 2%, with many less than half a per cent. However, COSCO Shipping Energy Transportation (SS:600026) experienced the most severe loss, falling by 5.3%. The price reached a support level amid increased volume, and the coming weeks will determine the next direction.
The second company with a loss beginning with a two is NYK Line (TSE: 9101). Here, the loss was 2.4%. Despite this decline, the share price remains above support, although only just.
Awilco LNG (OSE: ALNG) and Exmar (BSE: EXM) recorded almost identical losses, differing by one hundredth of a per cent. These were 1.37% and 1.38%, respectively. Nevertheless, Awilco seems to be poised for more significant growth for the second week in a row, while Exmar is moving sideways.
In percentage terms, further changes are not significant, but one group demonstrates a broader trend. This primarily involves the ongoing movement towards support levels of individual companies. This applies to MISC (KLSE: 3816), Mitsui O.S.K. Lines (TSE: 9104), “K” Line (TSE: 9107), Chevron (NYSE: CVX), and Shell (NYSE: SHEL).
Among the rising companies, New Fortress Energy (NYQ: NFE) once again led with a nearly 29% increase, while Korea Line Corporation (KRX: 005880) rose by almost 14%. KLC broke out of its sideways trend on very high volume and nearly reached the highest prices within its sideways trading range since the summer.
Adnoc L&S (ADX: ADNOCLS) rose nearly 5%, trying to sustain its growth trend after a correction.
Dynagas LNG Partners (NYSE: DLNG) made another attempt to rebound from support, rising 4.17%. It has not yet broken through the range.
Golar LNG (NYQ: GLNG) increased for the second consecutive week, returning to its previously broken support level. The rise was 3.6%.
Excelerate Energy (NYQ: EE) made a cautious attempt at growth, rising above the primary resistance zone, which is a price level that has not been sustained. The increase was 2.1%.
Nakilat (QSE: QGTS) remains in the support area but records a 0.5% growth.
The overall impression of the individual companies is therefore not negative, but they are on the cusp of change. However, strong fundamentals do not justify a long-term break through support levels; quite the opposite.
Crystal Ball
The late-summer rise was rejected, and UPI returned to its previous range, where it now trades. This area provides firm support. In the short term, we estimate a rise in volatility of UPI´s constituents.
Our outlook remains positive in the long term. Rising spot rates, scrapping of steam vessels and new liquification 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.