LNG Bunker Snapshot: Prices fall in Rotterdam and Singapore amid strong storage and weak demand
LNG bunker prices have decreased in both Rotterdam and Singapore this week, influenced by ample gas storage in Europe and lower demand across Asian markets.
PHOTO: CMA CGM's LNG-powered vessel bunkered at the Port of Rotterdam. CMA CGM
Changes in weekly LNG bunker prices:
- Rotterdam down by $28/mt to $720/mt
- Singapore down by $37/mt to $804/mt
Rotterdam
The LNG bunker price in Rotterdam has dropped by $28/mt to $720/mt in the past week. The port's benchmark has tracked the downward movement in the front-month NYMEX Dutch TTF Natural Gas contract.
This downward price movement is influenced by high gas storage levels in Europe. Despite maintenance-related gas flow reductions from Norway, storage facilities across the EU are continuing to fill up, now reaching over 93% capacity, according to ING's Warren Patterson. Ample gas storage has helped to alleviate some of the price pressures, even as supply from key sources like Norway remains constrained.
“Europe’s gas storage is nearly full, more than a month before temperatures are likely to drop enough to result in a sustained drawdown, which will ensure fuel remains plentiful this winter in all reasonable scenarios,” energy analyst John Kemp said.
Singapore
Singapore's LNG bunker price has also come down by a sharp $37/mt to $804/mt in the past week. This drop has been partially driven by changes in the NYMEX Japan/Korea Marker (JKM) contract, which has rolled from the higher-priced October contract to the lower November contract, pulling the JKM benchmark down and influencing the port's bunker price.
Demand for LNG cargoes in Asia has softened. According to a note from Australia’s ANZ Bank, "Imports are retreating in the Asian markets due to weak demand."
China and South Korea have maintained healthy LNG inventories. Both countries are making opportunistic spot purchases due to favourable market conditions, leading to stock levels that are nearing five-year highs, according to Rystad Energy.
By Debarati Bhattacharjee
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