LNG Bunker Snapshot: Rotterdam’s price jumps on colder weather and higher bunker delivery premium
Rotterdam’s LNG bunker price has climbed on colder European weather, firmer gas demand, and a sharp increase in bunker premiums, while Singapore’s price has increased in tandem, tracking strength in global gas benchmarks.
Weekly changes in LNG bunker prices:
- Rotterdam up by $73/mt to $797/mt
- Singapore up by $19/mt at $728/mt
Rotterdam
Rotterdam’s LNG bunker price has risen to $797/mt, supported by a sharp 40% increase in the assessed LNG bunker premium, which climbed from $139/mt to $195/mt.
Prices were also underpinned by a 3% gain in the front-month Dutch TTF Natural Gas contract, the main benchmark for European gas markets.
The TTF increase came amid “forecasts for colder weather and weaker wind generation,” according to the Japan Organization for Metals and Energy Security (JOGMEC).
“Colder weather, together with slower nuclear power output, boosted European gas demand,” said Greg Molnár, gas analyst at the International Energy Agency (IEA).
These moves were also “driven by stronger European gas demand and dwindling storage levels,” Molnár added.
“Europe has been experiencing colder-than-usual weather recently. There have also been growing concerns about EU gas storage,” two analysts at ING Bank echoed.
The EU’s underground gas storage level stood at 46% on 23 January, down from 50.8% the previous week and 19.4% lower year-on-year, data from Gas Infrastructure Europe showed.
“This was exacerbated by a record rally in US Henry Hub natural gas prices,” remarked Daniel Hynes, senior commodity strategist at ANZ Bank.
US natural gas futures surged to their highest level since 2022 “on concerns that freezing weather could threaten supply just as demand jumps for the fuel used for heating and power generation,” according to Stephen Stapczynski, Energy Asia team leader at Bloomberg News.
When US cold risk rises, the market typically prices in tighter domestic gas supply and potential disruptions to LNG export flows, a development that can quickly spill over into global markets and lend support to prices in Europe and Asia, explained Hendrian Sukardi, LNG market analyst at ENN Energy.
Singapore
Singapore’s LNG bunker price rose by $19/mt week-on-week, to $728/mt. The increase was mainly driven by a change in LNG bunker premiums, which moved from about $128/mt to $141/mt, representing a 10% increase. The price, which stood at a $15/mt discount to Rotterdam a week earlier, has since widened to a $69/mt discount.
The port’s LNG bunker prices typically track the NYMEX Japan/Korea Marker (JKM). The JKM front-month contract rose by $0.13/MMBtu over the week to $11.29/MMBtu ($587/mt).
The price was lifted “by strength in the European market, while a cold spell across Northeast Asia supported market sentiment,” according to JOGMEC.
“JKM followed TTF although at a more tepid pace... while the region is also facing a severe cold spell and have very limited underground storage capacity,” IEA’s Molnár commented.
“North Asia LNG prices also gained amid concerns of stronger demand,” ANZ Bank’s Hynes added.
Other LNG bunker news
LNG bunkering is now available at 222 ports worldwide, with a further 62 ports planning to offer the service, according to a report from industry body Sea-LNG.
Norwegian tanker company Bruton has received a financing proposal to build two very large crude carriers (VLCCs) designed to operate on LNG as well as conventional marine fuels.
Meanwhile, Chinese shipping firm COSCO Shipping Lines has ordered 12 LNG dual-fuel container vessels at Jiangnan Shipyard, a subsidiary of China State Shipbuilding Corporation.
By Tuhin Roy
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