LNG Bunker Snapshot: Rotterdam premium rises as Singapore holds steady
Singapore-ARA spread narrows to $134/mt
Low EU storage keeps winter supply concerns high
Higher bunker premium offsets lower JKM for Singapore LNG
Weekly changes in LNG bunker prices:
- ARA up by $12/mt to $1,432/mt
- Singapore down by $1/mt to $1,566/mt
- Baltics up by $12/mt to $1,537/mt
ARA
Rotterdam's LNG bunker price has edged higher, reversing two consecutive weeks of declines.
A higher premium over TTF has driven the increase, going from $2.48/MMBtu ($129/mt) a week ago to $2.62/MMBtu ($136/mt) in Rotterdam, and from $4.50/MMBtu ($234/mt) to $4.64/MMBtu ($241/mt) in the Baltics.
European natural gas prices have drawn support from pressure to replenish low stockpiles, with storage well below the seasonal norm of 87%, ANZ Bank's senior commodity strategist Daniel Hynes said.
Rising supply from the Middle East has failed to dent concerns about shortages over the coming heating season, he added.
Mind Energy said European gas storage is at its lowest level in at least 15 years and concerns about winter supply are high.
EU gas storage was 72% full on 2 October, up from 70% a week ago and 14% below a year earlier, according to Gas Infrastructure Europe.
Hynes said Europe may have to compete aggressively with Asian buyers to attract cargoes.
Only 17 LNG vessels transited the Strait of Hormuz in September, according to ship tracking data from Kpler, compared with 87 tankers in February, before the conflict.
Singapore
Singapore's LNG bunker price has held broadly steady, with a lower JKM balanced by a higher bunker premium. Its premium over ARA has narrowed from $147/mt a week ago to $134/mt.
Singapore's LNG bunker price typically tracks the front-month NYMEX Japan/Korea Marker (JKM), which has fallen by $0.11/MMBtu ($6/mt) to $25.71/MMBtu ($1,337/mt).
The decline has been largely offset by Singapore's bunker premium over JKM, which has gone from $4.31/MMBtu ($224/mt) a week ago to $4.41/MMBtu ($229/mt).
JKM rose early in the week on tight near-term fundamentals and potential Hormuz shipping disruptions, then fell on easing Middle East tensions and weak Asian demand, the Japan Organization for Metals and Energy Security (JOGMEC) said.
It rebounded as Hormuz supply-risk concerns resurfaced, then declined again on subdued buying interest in East Asia and expectations of a mild winter.
China and Japan have been largely absent from the market ahead of the winter heating season, Hynes said. The lack of urgency has been exacerbated by Indian buyers slowing their LNG purchases, he added.
Japan's LNG inventories for power generation stood at 2.41 million mt as of 27 September, down around 110,000 mt from the previous week, according to the Ministry of Economy, Trade and Industry (METI), JOGMEC said.
In other LNG bunker news, Swiss cruise operator MSC Cruises has launched an LNG-capable cruise ship at the Chantiers de l'Atlantique shipyard in Saint-Nazaire, France.
LNG-capable vessels once again accounted for the bulk of alternative-fuelled vessel orders, with 48 of the 69 placed during the month. Container ships led with 26 orders, followed by 18 car carriers, "reflecting a trend we have seen throughout the year," said DNV senior consultant Kristian Hammer.
French shipping company CMA CGM has received the third vessel in a series of 10 LNG-capable newbuilds.
Singapore-based shipowner Eastern Pacific Shipping (EPS) has taken delivery of a new LNG dual-fuel pure car and truck carrier (PCTC), which Spain's Suardiaz will operate under a charter.
The Engine & Machinery division of South Korea's HD Hyundai Heavy Industries has completed the Type Approval Test (TAT) for its new LNG dual-fuel engine.
Japan-based shipping company Nippon Yusen Kaisha (NYK Line) has launched the LNG dual-fuel LNG carrier Diamond Gas Nexus.
By Tuhin Roy
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