LNG Bunker Snapshot: Singapore-ARA spread halves as JKM tumbles
Singapore-ARA bunker spread more than halves to $147/mt
JKM tumbles $185/mt on ceasefire and strike's end
European bunker premiums edge wider on the week
Weekly changes in LNG bunker prices:
- ARA down by $36/mt to $880/mt
- Singapore down by $184/mt to $1,027/mt
- Baltics down by $36/mt to $986/mt
Europe
European LNG bunker prices have eased alongside a softer front-month TTF, which fell $0.77/MMBtu ($40/mt). The Japan Organization for Metals and Energy Security (JOGMEC) reported that the July gas contract dropped more than $1/MMBtu ($52/mt) early last week after a US-Iran ceasefire, with mild weather and steady supply pushing it lower still.
Both ARA and Baltic bunker prices have outperformed the gas benchmark, each falling less than TTF, and delivery premiums have edged wider. The ARA premium has firmed to $2.59/MMBtu ($135/mt) and the Baltic premium to $4.64/MMBtu ($241/mt).
The International Energy Agency's (IEA) Greg Molnar said an extreme heatwave has lifted European daily peak power prices above €200/MWh on rising cooling needs. He noted the heat is testing nuclear resilience, with France's St Alban and Bugey plants expected to run at reduced rates.
Molnar warned that stronger competition from Asia could curb LNG inflows to Europe and weigh on storage injections, adding that a reopening of the Strait of Hormuz would take at least eight weeks to restore supply. EU gas storage rose to 46.1% on 19 June, though stored volumes remained 23.6% below the five-year average, JOGMEC reported.
Asia
Singapore's LNG bunker price has fallen steeply in line with front-month JKM, which tumbled $3.55/MMBtu ($185/mt).
The Singapore-ARA bunker price spread has more than halved, narrowing from $295/mt to $147/mt. The collapse has tracked Singapore's steep decline alongside JKM, with its delivery premium little changed on the week at $4.44/MMBtu ($231/mt).
JOGMEC reported that JKM eased from the high-$17/MMBtu ($910/mt) range to the high-$15/MMBtu ($806/mt) range, falling early on after the US-Iran ceasefire and again once a strike at the Ichthys LNG project ended, after INPEX and its labour union reached a deal on 17 June. Prices then rebounded modestly on renewed Middle East uncertainty.
The IEA's Molnar said Asian LNG imports surged more than 10% year-on-year in the first half of June, after falling around 7%, or roughly 6 billion cbm, between March and May. ANZ Bank commodity strategist Daniel Hynes said warmer Asian temperatures have lifted cooling demand and increased competition for limited cargoes.
In other LNG bunker news, Singapore's LNG bunker sales hit a record high of 70,000 mt in May, up 66% on April, according to preliminary data from Singapore's port authority.
Mitsui O.S.K. Lines has signed liquefied biomethane supply deals with Axpo and Titan to fuel its car carriers in Northern Europe and the Mediterranean. The deal with Axpo covers the Spanish ports of Malaga and Barcelona.
Sallaum Lines has ordered two LNG dual-fuel car carriers from China's Xiamen Shipbuilding Industry with options for two more. The vessels are built ammonia-ready to allow for future retrofits to ammonia.
Molgas has completed its first LNG bunkering in the Italian port of Palermo, supplying a ferry by truck.
By Erik Hoffmann
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