Freight rates for liquefied natural gas (LNG) are now at a low ebb, with a tonnage overhang affecting the sector. Traditionally tied to long-term affreightment contracts, a spot shipping market for LNG emerged in 2011. LNG demand peaked as a consequence of Japan's suspension of nuclear power generation after the meltdown at the Fukushima plant following the Great East Japan earthquake in March 2011. As a result, LNG prices in Asia hit USD16 per MMBTU. Also, spot and short-term timecharter rates surged in 2011 and 2012, with peaks of USD150,000/day in the first half of 2012. That sent shipowners into newbuilding overdrive. Believing a spot market would emerge for LNG shipping, some of these owners not then involved in the business entered the LNG market.
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