- The LNG shipping market has witnessed contrasting fortunes this week, with rates surging in the Pacific while declining in Europe.
- Pacific spot LNG freight rates experienced a fifth consecutive weekly increase, reaching $72,750 per day.
- Atlantic rates fell for the third straight week, dropping to $75,000 per day.
- This divergence has led to a narrowing of the Atlantic-Pacific basin spread.
Factors influencing these trends include increased demand in Asia, rising European gas storage levels, and the ongoing recovery of US LNG exports.
Pacific Rates Surge
Pacific spot LNG freight rates continued their upward trajectory this week, increasing by $5,500 to reach $72,750 per day. This marks the fifth consecutive week of growth in the region. The surge in rates is attributed to robust demand for LNG in the Pacific basin.
European Rates Retreat
In contrast, European LNG freight rates experienced a decline. Spark30S Atlantic rates fell by $4,250 to $75,000 per day, marking the third consecutive week of decreases. This downturn is linked to increased supply availability in the region.
Widening Atlantic-Pacific Spread
The disparity between Pacific and Atlantic rates has widened significantly. The Atlantic-Pacific basin spread has narrowed from a record high of $37,250 to just $2,250. This reflects the imbalance in supply and demand between the two regions.
European Gas Market Update
European natural gas storage levels continue to rise, reaching 83.52% full. Consequently, the SparkNWE DES LNG front month price for August delivery decreased to $9.980/MMBtu.
Asian LNG Market Overview
In Asia, the JKM price for September delivery settled at $12.075/MMBtu. While experiencing fluctuations throughout the week, the overall trend indicates sustained demand for LNG in the region.
US LNG Exports and Egypt’s LNG Tender
The resumption of operations at the Freeport LNG export terminal has contributed to increased US LNG exports. Egypt has issued a new LNG tender to address growing domestic demand, highlighting the global appetite for the fuel.
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Source: LNG Prime
