LNG Bunker Snapshot: Rotterdam price retreats on weaker TTF

Singapore-ARA LNG spread flips to $179/mt premium

Rotterdam LNG bunker price breaks six-week rally

Middle East tensions lift Singapore LNG price

Weekly changes in LNG bunker prices:

• ARA down by $119/mt to $1,488/mt
• Singapore up by $130/mt to $1,667/mt
• Baltics down by $118/mt to $1,595/mt

ARA

Rotterdam’s LNG bunker price plunged by $119/mt week-on-week to $1,488/mt, ending a six-week streak of consecutive gains. This comes despite LNG bunker premiums climbing around 7% from about $125/mt to $134/mt.

The decline was primarily driven by an approximately 11% drop in the front-month Dutch TTF Natural Gas contract over the week. TTF is Europe’s benchmark gas price.

“Prices for natural gas and LNG in Europe… were dragged lower by the fall in crude oil prices,” said ANZ Bank’s senior commodity strategist Daniel Hynes.

Despite Europe’s competition with Asia for LNG and the Middle East situation impacting supply remaining key supporting factors, European LNG prices subsequently corrected lower, according to Mind Energy.

The research firm described the decline as a “pullback [that] seems of a rather technical nature following the most recent rally.”

“We open with price falls… in the wake of the growing hopes that the peace talks in the Middle East could resume soon,” Mind Energy added.

Milder weather across Europe has also recently limited gas demand, Mind Energy said.

“In Europe, preliminary data suggests that industrial gas demand already dropped by more than 5% yoy since May,” said International Energy Agency (IEA) gas analyst Greg Molnár, adding to the downward pressure on the benchmark.

Singapore

Singapore’s LNG bunker price surged by $130/mt over the past week to $1,667/mt, reversing its previous discount to Rotterdam. Singapore now trades at a $179/mt premium to Rotterdam, as prices in Singapore rose while those in Rotterdam declined.

Singapore’s LNG bunker prices typically follow the front-month NYMEX Japan/Korea Marker (JKM). The JKM has climbed by $2.62/MMBtu, equivalent to $136/mt, to $27.51/MMBtu ($1,431/mt).

The escalation of the Middle East conflict has heightened concerns over natural gas supply in both Asian and European markets. North Asian LNG prices jumped on expectations that Qatar’s supply curtailments could persist for the foreseeable future, according to ANZ Bank’s Daniel Hynes.

North Asian LNG prices have also been supported by strong buying interest. Thailand, Pakistan and Bangladesh are reportedly prepared to sign long-term LNG supply contracts with US exporters, Hynes added.

In other LNG bunker news, classification society Bureau Veritas Marine & Offshore (BV) has granted an Approval in Principle (AiP) to a liquefied CO2 carrier developed by Shanghai Merchant Ship Design & Research Institute (SDARI).

Classification society Korean Register (KR) and South Korea’s Hanwha Ocean have partnered to jointly develop two design concepts for an 18,000-cbm LNG bunkering vessel (LNGBV).

Taiwanese container shipping company Yang Ming has launched a new LNG dual-fuel container vessel.

Classification society DNV and ship registry Liberian International Ship and Corporate Registry (LISCR) have approved a 12,000-cbm LNG bunkering vessel concept developed by South Korea’s HD Hyundai Heavy Industries (HD HHI).

DNV has also approved an LNG dual-fuel carrier design developed by HD HHI.

Classification society American Bureau of Shipping (ABS) has approved the concept design of a 22,000-cbm LNG bunkering vessel developed by Hanwha Power, part of South Korea’s Hanwha Group.

Japanese shipping company Kawasaki Kisen Kaisha (K Line) has launched a new LNG dual-fuel LNG carrier at Samsung Heavy Industries’ shipyard in South Korea.

By Tuhin Roy

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