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Last week, LNG shipping rates continued to slide in both basins.
“Spark30S Atlantic rates have dropped to record lows, reducing by $2,500 to $18,250 per day” Qasim Afghan, Spark’s commercial analyst, told LNG Prime on Friday.
These are the lowest Spark30-174 rates in the last five years.
“Similarly, Spark25S Pacific rates continued to decline for a twelfth straight week, falling by $6,250 to $30,500 per day,” he said.
Currently, freight rates in both basins continue to be the lowest in the last five years for this time of the year due to higher intra-basin flows and higher vessel availability, as Spark’s netbacks tool currently show the US arb to NE-Asia via the Cape as closed for the next year.
Whilst the record-low Atlantic freight rates act to open the arbitrage to Asia, the recent TTF rally has narrowed the JKM-TTF spread and thus kept the US arb (via the Cape) firmly closed, Spark said in a report on Thursday.
Currently, Spark30S rates would have to go negative for the front month arb to open up again, according to Spark.
European prices down
In Europe, the SparkNWE DES LNG was lower compared to $13.104/MMBtu last week.
“The SparkNWE DES LNG front month price for December delivery is pricing in at $12.699/MMBtu,” Afghan said.
“The discount to the TTF narrowed slightly, currently assessed at – $0.215/MMBtu,” Afghan said.
Data by Gas Infrastructure Europe (GIE) shows that volumes in gas storages in the EU declined slightly compared to the previous week and were 95.20 percent full on October 30.
Gas storages were 95.26 percent full on October 23 and 99.10 percent full on October 30, 2023.
JKM
In Asia, JKM, the price for LNG cargoes delivered to Northeast Asia in December settled at $13.620/MMBtu on Thursday.
Last week, JKM for December settled at 13.795/MMBtu on Friday, October 25.
Front-month JKM then dropped to 13.775/MMBtu on Monday. It decreased to 13.685/MMBtu on Tuesday and 13.520/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 21 – October 25) rose to low-$14s on October 25 from low-$13s the previous weekend.
“The price was upward trend through the week due to growing supply concerns from unplanned maintenance at the Norwegian gas field and falling US feed gas supplies. JKM hit its highest since this August. Demand in Asia remains low due to high level of their stocks,” JOGMEC said.