LNG Bunker Snapshot: Colder temperatures push Rotterdam's price higher

Rotterdam’s LNG bunker price has increased due to colder temperatures in Europe, while weak demand in Asia's broader LNG market continues to weigh down on Singapore’s price.

Changes in weekly LNG bunker prices:

• Rotterdam up by $48/mt to $900/mt
• Singapore up by $7/mt to $853/mt

Rotterdam

Rotterdam's LNG bunker price has leaped $48/mt higher over the past week, reaching $900/mt. This sharp increase is linked to a 3% rise in the front-month Dutch TTF Natural Gas contract, a key European gas benchmark, which has been driven by colder-than-usual temperatures.

“Previous weeks were colder than usual, resulting in increased demand for gas, which promptly kept TTF prices elevated,” according to Rystad Energy.

Additionally, Rystad Energy attributed the recent LNG price hike to a "Dunkelflaute" episode, a period of low wind and solar power generation caused by calm, overcast weather - which is common in the winter.

“The lack of wind has exacerbated the cold temperature in recent weeks, resulting in yet another Dunkelflaute episode. This led to more gas-to-power generation, which has pushed prices up,” Rystad Energy stated.

Energi Danmark also highlighted “reports of reduced US LNG exports as cold winter weather has led to issues with shipping from the large Freeport LNG facility.”

Singapore

Singapore's LNG bunker price has increased by a modest $7/mt over the past week, reflecting weak LNG demand in northeast Asia. The price discount to Rotterdam has widened from $6/mt to $47/mt within a week.

“Demand in Asia remains tepid, with East Asia demand relatively construed amidst warmer-than-usual weather,” Rystad Energy noted.

This trend is expected to continue, as the Japan Meteorological Agency forecasts at least a 50% chance of above-normal temperatures across Japan from mid-January to mid-February. Similarly, the Korea Meteorological Administration predicts a 40% chance of above-normal temperatures through the first week of February.

“East Asia has reported sufficient energy storage levels throughout the current winter,” Rystad Energy added.

According to Japan’s Ministry of Economy, Trade and Industry (METI), LNG inventories for power generation stood at 2.32 million mt as of 19 July, up by 210,000 mt from the previous week, as reported by JOGMEC.

Regional LNG bunker prices remain linked to NYMEX Japan/Korea Marker (JKM) values, with the front-month JKM contract rising by $0.33/MMBtu to $14.11/MMBtu over the same period.

By Tuhin Roy

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