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Last week, Atlantic LNG shipping rates dropped to $26,750 per day.
“Spark30S Atlantic rates dropped for a fifth consecutive week, reducing by $6,000 to $20,750 per day,” Qasim Afghan, Spark’s commercial analyst, told LNG Prime on Friday.
“Oct2024 is set to be the lowest priced month of the year for Atlantic freight rates, and Spark’s FFA forward curve shows that currently November is pricing in at lower still, providing no signs of the seasonal Winter rally,” he said.
Similarly, Spark25S Pacific rates continued to decline for an eleventh straight week, falling by $5,500 to $36,750 per day.
“Freight rates in both basins continue to be at their lowest levels in 5 years for this time of year,” Afghan said.
According to a report by Platts, part of S&P Global Commodity Insights, the absence of arbitrage opportunities and contango has left LNG shipping rates unsupported, while unusually high temperatures compared to previous years further exacerbate the situation.
“High gas storage levels in Europe and Asia, and subdued cargo requirements coupled with an oversupply of ships, have contributed to the depressed rate environment,” Platts said.
European prices rise
In Europe, the SparkNWE DES LNG was higher compared to the last week.
“The SparkNWE DES LNG front month price for November delivery increased by $0.772, pricing in at $13.104/MMBtu,” Afghan said.
“This is the highest front month DES LNG price of 2024 so far, driven mainly by the TTF rally seen in the last few days,” he said.
“The discount to the TTF narrowed slightly, currently assessed at -$0.235/MMBtu,” Afghan said.
Data by Gas Infrastructure Europe (GIE) shows that volumes in gas storages in the EU continued to rise and were 95.26 percent full on October 23.
Gas storages were 95.05 percent full on October 16 and 98.61 percent full on October 23, 2023.
JKM
In Asia, JKM, the price for LNG cargoes delivered to Northeast Asia in December settled at $13.720/MMBtu on Thursday.
Last week, JKM for December settled at 13.275/MMBtu on Friday, October 18.
Front-month JKM then rose to 13.340/MMBtu on Monday. It rose to 13.525/MMBtu on Tuesday and to 13.595/MMBtu on Wednesday.
State-run Japan Organization for Metals and Energy Security (JOGMEC) said in a report earlier this week that JKM for last week (October 14 – October 18) fell to low-$13s on October 18 from mid $13s the previous weekend
“In the middle of the week, the price rose temporarily due to the colder weather than expected and geopolitical risk. But generally, it was small price movement on the ground of high price and solid supply throughout the week,” JOGMEC said.