Spot LNG shipping rates continue to drop, European prices climb

Spot charter rates for the global liquefied natural gas (LNG) carrier fleet continued to decrease this week, while European prices rose compared to the week before.

Last week, charter rates also fell compared to the week before.

“Freight rates in the Atlantic and Pacific basins continue to fall for the third consecutive week, with the Spark30S Atlantic spot rate falling by $1,000 per day to $43,750 per day, and the Spark25S Pacific rate falling by $250 per day to $46,750 per day,” Qasim Afghan, Spark’s commercial analyst told LNG Prime on Friday.

“The Spark30S Atlantic spot rate is at its lowest point when compared to the same period in the last four years,” he said.

Spot LNG shipping rates continue to drop, European prices jump
Image: Spark

LNG freight rates remain low despite the fact that LNG carriers are still avoiding the Suez Canal due to the situation in the Red Sea and the lower LNG transits in the Panama Canal due to a drought situation.

The Panama Canal Authority said in a statement this week that current forecasts indicate that steady rainfall would arrive in late April and continue for a few months.

“If this remains the case, the canal plans to gradually ease transit restrictions, allowing conditions to fully normalize by 2025,” it said.

The authority currently offers in total up to 27 transits per day.

Europe to compete for cargoes at higher prices

In Europe, the SparkNWE DES LNG front month jumped compared to the last week.

“The SparkNWE DES LNG front month price for May delivery is assessed at $8.992/MMBtu and at a $0.225/MMBtu discount to the TTF,” Afghan said.

He said this is a $0.945/MMBtu increase in DES LNG price, the largest weekly increase in SparkNWE DES LNG price in six months (October 2023), and the highest DES LNG price in three months (January 2024).

“The NWE basis reached the narrowest differential to the TTF year to date this week as the arb to send cargo to Asia for US volumes remains open, requiring Europe to compete for cargoes at higher price levels,” Afghan said.

Image: Spark

Levels of gas in storages in Europe are very high following a mild winter and the EU-27 ended the winter with record-high stocks in gas storages.

Data by Gas Infrastructure Europe (GIE) shows that volumes in gas storages in the EU rose and they were 61 percent full on April 10.

Gas storages were 59.44 percent full on April 3, and 55.98 percent full on April 10 last year.

Freeport LNG

US LNG exports dropped in the week ending April 10 compared to the week before while the Freeport LNG terminal in Texas still operates with only one train.

The LNG terminal operator told LNG Prime last month that its third train is currently online and producing LNG.

According to reports, the third LNG train tripped offline due to an issue with a flow meter on April 9 and came back online on April 10.

Platts, part of S&P Global Commodity Insights, said in a report on Thursday that supply concerns gave a jolt to the Atlantic LNG prices April 11, as the market remained vigilant to an outage at Freeport LNG and Russian attacks on two gas storage sites in Ukraine.

Across the Atlantic, the Platts DES Northwest Europe Marker for May was assessed at $9.044/MMBtu April 11, up 67.9 cents/MMBtu. Platts last assessed NWE higher on January 12 at $9.42/MMBtu.

The Platts Gulf Coast Marker also saw a significant jump following the news, rising 66 cents/MMBtu on the day to be assessed at $8.42/MMBtu, it said.

JKM up

This week, JKM, the price for LNG cargoes delivered to Northeast Asia, rose slightly when compared to the last week, according to Platts data.

JKM for May settled at $9.610/MMBtu on Thursday.

State-run Japan Organization for Metals and Energy Security (JOGMEC) said in a report earlier this week that the JKM remained unchanged during the previous week.

“The price trended lower mid-week on the back of weak demand in major LNG consuming countries in Asia, but the decline was offset over the weekend by active trading due to demand for inventory injections, especially in Japan,” it said.

Japan’s METI said that Japan’s LNG inventories for power generation as of April 7 stood at 1.60 million tonnes, up 0.12 million tonnes from the previous week.

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