Rotterdam’s LNG bunker price has risen amid stronger gas demand and higher bunker premiums, while Singapore’s price remained stable.

Weekly changes in LNG bunker prices:

• Rotterdam up by $32/mt to $753/mt
• Singapore up by $1/mt at $781/mt

Rotterdam

Rotterdam’s LNG bunker price has climbed after two straight weeks of declines, driven up by a 3% rise in the front-month Dutch TTF Natural Gas contract, a key benchmark for European gas prices.

The price rise has come amid “increased demand for air conditioning due to the hot weather, demand for injection into underground gas storage, and continued demand for gas transportation to Eastern Europe,” according to the Japan Organization for Metals and Energy Security (JOGMEC).

EU underground gas storage levels reached 62% on 11 July, up from 60% the previous week. However, this was 23% lower than at the same time last year, based on data from Gas Infrastructure Europe.

European gas prices have been rising “amid concerns that a heat wave in North Asia will limit the amount of LNG available to help refill its storage facilities,” said Daniel Hynes, senior commodity strategist at ANZ Bank.

“European traders are also concerned that Trump may place tougher sanctions on Russian LNG supplies,” Hynes added. These concerns have put upward pressure on European gas prices.

“European natural gas prices also moved higher on the back of the escalation in the Middle East amid concerns that more than 20% of global LNG trade could be at risk with a potential disruption to shipping flows through the Strait of Hormuz,” said Warren Patterson, ING’s head of commodity strategy.

A $10/mt rise in the estimated LNG bunker delivery premium assessed by ENGINE has also contributed to the price increase. The premium is around $130/mt now.

Singapore

Singapore’s LNG bunker price has held steady from the previous week, reflecting a stable front-month NYMEX Japan/Korea Marker (JKM), which typically guides Asian LNG bunker pricing.

As a result, Singapore’s substantial $59/mt discount to Rotterdam has narrowed by roughly half over the past week, now standing at $28/mt.

“Increased demand caused by rising temperatures in Northeast Asia” has added some upward pressure on Asian LNG prices, according to JOGMEC.

“Spot LNG buying in Asia is gaining momentum amid heatwaves,” noted Masanori Odaka, senior analyst at Rystad Energy.

“With elevated temperatures in demand centers such as Japan, South Korea and other parts of Asia, the Asia-Pacific region will likely have pricing support,” Odaka said.

LNG inventories for power generation in Japan were reported at 2 million mt as of 6 July, down 150,000 mt from the previous week, according to Japan’s Ministry of Economy, Trade and Industry (METI).

“LNG inventories held by Japanese utilities slid to their lowest in almost two months amid strong power consumption,” ANZ Bank's Daniel Hynes said.

However, this upward pressure has been offset by weak LNG demand from China.

“Hot summer weather isn't expected to revive China's weak LNG demand,” said Stephen Stapczynski, Energy Asia team leader at Bloomberg News.

Chinese demand is sluggish because of cheap coal, high fuel inventories, growing renewable energy use, increased pipeline gas supply and high spot LNG prices, Stapczynski said.

Some market watchers believe that “heavy rainfall in China will dampen the need for LNG imports as the country already has sufficient access via pipelines and long-term LNG contracts,” Rystad Energy noted.

Other LNG bunker news

Energy company Axpo has supplied approximately 2,700 mt of LNG to one of Mediterranean Shipping Company’s (MSC) dual-fuel container vessels in Portugal's Sines.

French shipping firm CMA CGM has launched the fourth in a series of six LNG-capable vessels that are being built for it in South Korea.

Global marine fuel supplier Shell Marine has delivered an unspecified amount of LNG to a Hyundai Glovis-operated car carrier in Singapore.

In Lithuania, terminal operator KN Energies is set to launch “virtual” biomethane liquefaction at its Klaipėda LNG terminal .

By Tuhin Roy

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