Atlantic LNG Shipping Rates Soar While European Prices Hold Steady

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  • The Atlantic LNG shipping market is experiencing a boom, with rates for Spark30s vessels reaching a record high of $87,000 per day this week.
  • This significant increase comes in contrast to Europe, where LNG prices have remained stable.

Atlantic Rates on a Tear

This week saw a dramatic rise in Atlantic LNG shipping rates. Spark30s vessels, which are typically used for transporting large volumes of LNG across long distances, hit a record-breaking daily rate of $87,000. This represents a jump of $12,000 from the previous week and a staggering $35,000 increase over the past month.

Analysts attribute this surge to several factors. Firstly, demand for LNG in the Atlantic basin is on the rise. Secondly, the arbitrage route between the US and Northeast Asia remains open, creating additional opportunities for LNG traders. This arbitrage route allows for the profitable transportation of LNG from the US to Asia, where prices are typically higher.

Pacific Rates Show Signs of Growth

While not as dramatic as the Atlantic, Pacific LNG shipping rates are also showing signs of upward movement. Spark25S rates, which are for smaller vessels used in regional trade, rose by $4,000 this week to reach $51,750 per day. This upward trend suggests that the factors driving the Atlantic boom may also be impacting the Pacific market.

Europe Maintains Price Stability

Unlike the Atlantic and Pacific regions, European LNG prices have remained relatively stable this week. The SparkNWE DES LNG front month price for July deliveries sits at $10.731/MMBtu, with a slight discount to the TTF benchmark. Additionally, gas storage facilities in Europe continue to fill up, reaching 76.20% full on June 26th. This high storage level suggests that Europe is well-positioned to meet its upcoming winter demand.

Elsewhere in the LNG Market

  • Prices for LNG deliveries to Northeast Asia (JKM) have also seen a slight increase, settling at $12.660/MMBtu for August deliveries.
  • Egypt recently awarded contracts for a large LNG cargo tender. Winning bids ranged from TTF plus $1.60/MMBtu to TTF plus $2.00/MMBtu.
  • Chevron’s Wheatstone LNG export facility in Australia has resumed full production after a brief outage for repairs.

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Source: LNG Prime