Spot LNG shipping rates down, European and Asian prices up

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

Last week, Atlantic spot LNG freight rates dropped below $50,000 per day as the spot fixing window moved into the seasonally softer Q2 period.

“Spark freight rates fell further this week, with the Spark30S Atlantic spot rate falling by $2,000 to $47,750 per day, and the Spark25S Pacific rate falling by $4,750 per day to $53,500 per day,” Qasim Afghan, Spark’s commercial analyst, told LNG Prime on Friday.

He said these are the lowest freight rates reported since June 2023.

Image: Spark

LNG freight rates are continuing to decrease despite the fact that LNG carriers are still avoiding the Suez Canal due to the situation in the Red Sea.

Since January, LNG carriers, including Qatari vessels delivering LNG shipments to Europe, are favoring the Cape of Good Hope for safer passage.

Kpler said previously that the Suez Canal has witnessed no LNG transits since January 17.

In addition, due to a drought situation impacting the Panama Canal, LNG transits through the waterway keep declining as well.

Official data previously showed that LNG transits dropped to 326 in fiscal 2023 from 374 in 2022 and 537 in 2021.

European and Asian prices rise

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

The NWE DES LNG for March delivery was assessed last week at $6.858/MMBtu.

“The SparkNWE DES LNG price is reported at $7.401/MMBtu, corresponding to a $0.543/MMBtu week-on-week increase,” Afghan said.

“This is the first week-on-week increase in 4 weeks, and the largest weekly gain since October 2023,” he said.

Image: Spark

Levels of gas in storages in Europe remain high for this time of the year due to mild weather.

Data by Gas Infrastructure Europe (GIE) shows that gas storages in the EU were 62.78 percent full on February 28. Gas storages were 64.69 percent full on February 22.

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

JKM for April settled at $8.370/MMBtu on Thursday.

According to Platts, Chinese buyers are buying spot LNG cargoes due to low prices and to rebuild inventory after the Lunar New Year holiday.

Platts, part of S&P Global Commodity Insight, said in a report earlier this week that Chinese LNG buyers have engaged in “a flurry of purchasing” following the sharp decline in Asia-Pacific spot prices, with some 10 cargoes changing hands in the week ending February 23.

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