Both Singapore and the ARA have seen smaller bunker delivery premiums over underlying LNG wholesale contracts, especially in the ARA.

Changes in weekly LNG bunker prices:

• Rotterdam up by $11/mt to $756/mt
• Singapore down by $63/mt to $815/mt

Singapore

Singapore’s delivered LNG bunker price is down sharply on the week, with a drop in the underlying front-month NYMEX Japan/Korea Marker (JKM) contract weighing on the bunker price, and as bunker delivery premiums have come off amid lower bunker demand.

In the past week, JKM has rolled over to February as the front-month and that was priced over $2/MMBtu ($110/mt) lower than the previous January front-month contract. The February contract has reclaimed $0.90/MMBtu ($47/mt) since then, but is still down on the week compared to the previous January contract.

Singapore’s LNG bunker sales were nearly halved last month, from 51,000 mt in October to 28,000 mt in November. Sales climbed to a peak of 52,000 mt in June, but have yet to surpass that since, despite ever more LNG-capable vessels entering the global fleet.

Part of the answer to the stagnation and decline in LNG sales can be found in price. LNG has been unattractive based on price against HSFO, VLSFO and LSMGO for months, including with estimated EU Emissions Trading System (EU ETS) costs added for voyages from Singapore to EU ports.

Several dual-fuel vessel owners will have found either of those conventional oil-based fuels to be a more favourable choices if price was their decisive factor. This will have put downward pressure on bunker delivery premiums, which have been seen falling from about $2.50/MMBtu ($130/mt) earlier this year, to about $2/MMBtu ($104/mt) now, according to a trader.

Rotterdam

The story is similar in the ARA, but with a greater impact on bunker delivery premiums, which are down from about $2.25/MMBtu ($117/mt) when LNG bunker demand was stronger, to about $0.85/MMBtu ($44/mt) now.

Dutch TTF Natural Gas contract is up again after a dip towards 16 December, and has yet to hit the multi-year highs we saw in late November.

LNG bunker prices for delivery in the Baltics region and off Skaw are at premiums of around $100/mt over the ARA, and Sines in Portugal prices it around $107/mt on top of the ARA.

By Erik Hoffmann

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