LNG Bunker Snapshot: Rotterdam’s price falls on easing Middle East tensions

Rotterdam’s LNG bunker price has fallen on weaker European gas benchmark and easing geopolitical tensions, while Singapore’s price has declined amid softer Northeast Asian demand.

Weekly changes in LNG bunker prices:

• Rotterdam down by $91/mt to $894/mt
• Singapore down by $224/mt at $980/mt

Rotterdam

Rotterdam’s LNG bunker price has dropped by $91/mt week-on-week to $894/mt, even as LNG bunker premiums climbed by 23%, rising from about $130/mt to $160/mt.

The decline was mainly driven by an approximately 15% fall in the front-month Dutch TTF Natural Gas contract over the week, Europe’s key gas benchmark.

The price drop was “due to expectations of a second round of US-Iran peace talks and decreased demand due to rising temperatures,” and was further supported by “expectations of easing tensions in the Middle East and a recovery in wind power generation,” according to the Japan Organization for Metals and Energy Security (JOGMEC).

“European gas prices continue to edge lower amid hopes of de-escalation in the Middle East,” two analysts from ING Bank noted.

“The market is responding to the US indications that peace talks with Iran are moving in the right direction, which could eventually lead to a complete reopening of the Strait of Hormuz. Healthy flows from Norway added to the downside,” Mind Energy added.

“Pipeline imports from Norway remain elevated,” market research firm Rystad Energy said.

EU underground gas storage stood at 29.5% on 17 April, up from 29.2% a week earlier, but still 17.3% lower year-on-year, according to data from Gas Infrastructure Europe.

Notably, Rotterdam’s LNG bunker volumes rose by 39% from the fourth quarter of last year to the first quarter of this year, while sales increased by just 2% year-on-year.

Singapore

Singapore’s LNG bunker price has declined for a third straight week, weighed by “expectations of progress in negotiations between the US and Iran and weak demand in Northeast Asia,” according to JOGMEC.

The drop mirrors a 23% fall in the NYMEX Japan/Korea Marker (JKM) benchmark over the week, with the front-month contract settling at $15/MMBtu ($780/mt). Singapore’s premium over Rotterdam has also narrowed sharply, from $219/mt to about $86/mt within a week.

“North Asia LNG prices also pushed lower… Asian LNG imports have fallen to their lowest level since 2020,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

“Asian LNG imports plummet as the conflict in the Middle East chokes supplies and forces buyers to curb consumption,” added Stephen Stapczynski, Energy Asia team leader at Bloomberg News.

Japan’s LNG inventories for power generation stood at 2.29 million mt on 12 April, up by 70,000 mt from the previous week, according to data from Japan’s Ministry of Economy, Trade and Industry.

Above-average temperatures in Japan are forecast to persist until 28 April, and strong renewable output - particularly from solar - will keep gas demand for power subdued for the rest of the month. Similar conditions are expected in South Korea, with above-average temperatures forecast until 22 April, while China is also set to see warmer-than-normal temperatures through the remainder of April, Rystad Energy noted.

Meanwhile, Singapore’s LNG sales declined by 17% in March. Average daily LNG sales dropped by more than 500 mt to 1,600 mt. Despite this, total LNG sales for the first three months of the year reached nearly 151,000 mt, up from 102,000 mt a year earlier.

Other LNG bunker news

Compatibility between LNG systems and low-GHG methane lowers infrastructure barriers, shifting the main constraints to fuel production and cost, according to DNV.

MOL Encean, a subsidiary of Japan’s shipping major Mitsui O.S.K. Lines, has signed a long-term charter agreement with Inpex Shipping, part of Inpex Corporation, for a new LNG dual-fuel LNG carrier.

Carnival Corporation subsidiary Princess Cruises has reached an agreement with Italian shipbuilder Fincantieri to construct three Voyager-class LNG dual-fuel cruise ships.

Finnish shipping company Wasaline will continue using liquefied biomethane (LBM) on one of its vessels through 2027, with fuel supplied by Gasum.

By Tuhin Roy

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