Fuel Switch Snapshot: LNG premiums narrow in Rotterdam

Rotterdam’s LNG returns to discount to B24-VLSFO

Singapore’s LNG and bio-bunker sales drop

Spot biofuel demand low in Singapore

CHART: The dots represent bunker fuel prices adjusted for calorific contents to become VLSFO-equivalents, and with various estimated levels of EU ETS costs in 2024 excluded (Rotterdam) and included (Rotterdam to non-EU port and Rotterdam to EU port). ENGINE, PRIMA Markets, NYMEX

A sharp drop in Rotterdam’s LNG price in the past week has flipped it to a $20/mt discount to B24-VLSFO HBE, after having been at a $76/mt premium a week earlier.

Similarly, LNG's premium over LSMGO in Rotterdam has narrowed significantly, dropping by $104/mt in a week to just $8/mt.

In Singapore, LNG remains at a $30/mt premium over its B24-VLSFO UCOME blend.

The port recorded a decline in both bio-bunker and LNG sales in November. Bio-blended bunker sales fell by 21% to 115,000 mt, down from the October peak of 145,000 mt. LNG bunker sales have seen an even steeper drop, plunging 46% lower to 28,000 mt.

VLSFO

Rotterdam’s VLSFO price has increased by $15/mt in the past week.

Availability of the grade remains stable in Rotterdam. However, independently held fuel oil stocks in the wider ARA region fell by 2% in November compared to October, according to Insights Global data.

Singapore's VLSFO price has dropped by $7/mt over the past week, driven by a slight improvement in the grade's availability at the port. Suppliers now suggest lead times of around seven days, down from 10 days the previous week.

Biofuels

The VLSFO-equivalent price of B24-VLSFO in Rotterdam has gained by $10/mt in the past week.

Dutch rebates for biofuel have dropped sharply in recent weeks. The theoretical rebate for B30-VLSFO HBE blends sold in Dutch ports is now at $120/mt, compared to $143/mt a week ago and a significant decline from the record high of $220/mt noted last month.

Meanwhile, Singapore’s B24-VLSFO UCOME price has remained unchanged in the past week.

Spot biofuel demand continues to be low in Singapore. One supplier can deliver B24-VLSFO with lead times of up to 10 days. Suppliers in Singapore sold about 115,000 mt of bio-blended bunkers in November, down from 145,000 mt sold in October.  

LNG

Rotterdam’s LNG bunker price has plummeted by $85/mt in the past week.

This has tracked a 12% drop in the underlying Dutch TTF Natural Gas contract amid forecasts of milder weather. These forecasts have eased concerns about Europe’s heating season, reducing any near-term demand pressure on LNG.

Singapore's LNG bunker price has dropped by a smaller $13/mt in the past week, largely tracking a decline in the NYMEX Japan/Korea Marker (JKM) contract.

LNG bunker delivery costs in Singapore are estimated to have gone down by $13/mt on the week, to $104/mt. This seems to have added some downward pressure on the price.

By Konica Bhatt, Nithin Chandran and Debarati Bhattacharjee

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