LNG Bunker Snapshot: Prices down on impact of US tariffs

Rotterdam’s LNG bunker price has fallen, driven by the impact of US tariffs and subdued demand.

Changes in weekly LNG bunker prices:

• Rotterdam down by $75/mt to $735/mt
• Singapore down by $3/mt to $781/mt

Rotterdam

Rotterdam’s LNG bunker price has dropped sharply for the second consecutive week, largely driven by a nearly 10% fall in the front-month Dutch TTF Natural Gas contract, a key European gas benchmark.

The decline in TTF followed “the announcement of the tariff measures by the United States in the first half of the week [last week],” according to the Japan Organization for Metals and Energy Security (JOGMEC).

LNG prices fell further “due to concerns about an economic recession caused by the announcement, as well as continued weakness in fundamentals such as rising temperatures and strong supplies from the Norwegian continental shelf,” JOGMEC added.

“The potential EU-US trade war which could start very soon has the potential to weaken economy and demand” for LNG, Energi Danmark argued, highlighting additional downward pressure.

Prices were also pushed lower “due to weaker downstream demand, an urgency to store and a healthy LNG supply from the US,” commented Rystad Energy.

Further contributing to the decline was a reduction in the estimated LNG bunker premium, which has dropped from $120/mt to $111/mt.

Singapore

Singapore’s LNG bunker price has dipped slightly by $3/mt over the past week, influenced by the “announcement of the tariff measures by the US,” which “led to a continued decline in the second half of the week due to concerns about the impact on the macro economy,” according to JOGMEC.

LNG inventories for power generation stood at 2.24 million mt as of 30 March, an increase of 410,000 mt from the previous week, according to Japan’s Ministry of Economy, Trade and Industry (METI).

Temperatures in Tokyo are expected to exceed 20 degrees Celsius from 8 April, which is likely to trigger a significant drop in gas consumption and power prices and mark the end of winter gas demand in most parts of the country, Rystad Energy commented.

Asian LNG bunker prices generally follow the NYMEX Japan/Korea Marker (JKM), which declined by $0.17/MMBtu over the same period, bringing the front-month contract to $12.92/MMBtu, equivalent to $672/mt.

Meanwhile, Singapore’s LNG bunker price, which was at a $26/mt discount to Rotterdam last week, has flipped to a $46/mt premium within just one week.

By Tuhin Roy

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