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LNG shipping stocks: Volatility rises again

Tuesday, 11 June 2024 | 13:00

The UP World LNG Shipping Index (UPI) continues to move mildly; last week, it grew again. This time, however, the index’s slight movements hide the more turbulent development of individual companies, although the traded volume returned to the average. Of course, the overall events in the stock markets also influence it. We can say that the two largest companies mainly influenced overall growth because most companies lost. The demand for LNG remains strong, mainly in Asia.

UPI gained 0.24 points or 0.15% last week, reaching a closing value of 162.46 points. This index monitors the stocks of companies that specialise in LNG shipping. The S&P 500 (SPX) index, representing US stocks, gained 1.3%. The image below displays both indices.

Week 24-2024: Chart of the UP World LNG Shipping Index with S&P 500 (Source: UP-Indices)

Nakilat (QSE: QGTS) scored the most significant growth, growing by 8.5 %. The second largest UPI company, Golar LNG (NASDAQ: GLNG), has grown by only one per cent, but thanks to their weight of 20 % each, it was enough for the slight UPI growth.

The growing companies include the Japanese “K” Line (TSE: 9107), which has added growth of 5.8 %, and Malaysian MISC (KLSE: 3816), which continues to grow by 2.9 %. Two other Japanese companies—NYK Line (TSE: 9101) and Mitsui O.S.K. Lines (TSE: 9104)—have added growth of 1.3 % and 0.5 %, respectively.

The most significant decline was as large as the largest growth: 8.5 % lost Cool Company (NYSE/OSE: CLCO), followed by New Fortress Energy (NASDAQ: NFE), which lost 8.2 %. NFE has been losing since the beginning of the year, and last week, it broke important support at $25.

The oil and gas drilling sector representatives are currently struggling. However, the development of the LNG shipping market has only had a limited impact on them, resulting in these companies having a limited effect on UPI. The most significant decline was seen in BP (NYSE: BP), which lost 6.1%, followed by Shell (NYSE: SHEL), which lost 4.6%. BP’s stock returned to values from the beginning of this year, and Shell’s declines appear to have ended the growth seen in April. Chevron (NYSE: CVX) experienced a 3.8% decrease.
Dynagas LNG Partners (NYSE: DLNG) continues on the wild road to the side. This time, its price dropped by 5.6 %. Nevertheless, it moves on to the long-term highest values. Awilco LNG (OSE: ALNG) lost 4.1 %, but it was a correction of previous growth, which reached almost 9 % in one week.

Flex LNG (NYSE/OSE: FLNG) fell before the dividend due to the expected worse development in the second quarter. According to the management, there is no risk of reducing dividends when reporting results in the first quarter.
Last week, the sellers at Capital Product Partners (NASDAQ: CPLP) pushed the stock down by 3.3%.
In summary, UPI continues to move slightly to the side and is still near its maximum. Growth was mainly due to the two largest companies in UPI, which overrun a decline in the remaining.

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 18 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: By Tomas Novotny, UP-Indices.com

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