Spot rates for liquefied natural gas (LNG) shipping will be unprofitable in the next two years, Bloomberg reports, citing a report fromRS Platou Economic Research.
With Japan's nuclear power plants planned to go back online and more Middle East LNG cargoes heading to Asia, distances of LNG voyages will get shorter, while new vessels will join the global fleet, pushing down rates.
The report predicts that average rates for modern steam vessels will fall to $108,000 per day this year, $92,000 per day in 2014, and $69,000 per day in 2015.
"Utilization is thus expected to decline from the present high level," Jorn Bakkelund, a partner with the research firm, said in the report.
"Spot rates should linger just below the break-even level."
Earlier this year, Drewry Shipping Consultants predicted that LNG freight rates would be under pressure due to tight supply and new vessel deliveries, but said that will change as more LNG export projects come online in the second half of the decade.
Analysts have also predicted that LNG carriers such as Golar LNG Ltd. will do well despite falling rates.