- Sharp declines in LNG bunker prices in Singapore and Rotterdam have narrowed the price gaps with conventional fuels, reflecting changes in supply and demand dynamics.
- Bio-blended bunker sales in Singapore surged in August despite low spot demand, while prices in Rotterdam saw a slight increase.
- Falling LNG bunker prices, driven by high gas storage levels in Europe and softening demand in Asia, signal ample supply in the market.
Both Singapore and Rotterdam saw sharp drops in LNG bunker prices, narrowing the premium over conventional fuels, reports Engine.
LNG Bunker Price Premiums Narrow
In Rotterdam, the premium over VLSFO decreased by $30/mt to $90/mt, and the premium over LSMGO fell by $27/mt to just $5/mt. When factoring in EU Allowances (EUAs), LNG is now cheaper by $2-8/mt than LSMGO in the port. Similarly, Singapore LNG’s premium over VLSFO shrank by $23/mt to $94/mt, with its premium over LSMGO dropping $36/mt to $67/mt.
Shift in Singapore’s B24-VLSFO and B24-LSMGO Spread
The price gap between Singapore’s B24-VLSFO and B24-LSMGO widened, with the discount increasing from $9/mt to $18/mt.
This signals a growing divergence between the two fuel grades in the region over the past week.
Rotterdam’s Steady VLSFO Amidst Rising Brent Futures
Rotterdam’s VLSFO price remained steady with a modest increase of $6/mt, contrasting with the significant $2.88/bbl ($21/mt) rise in the front-month ICE Brent futures contract.
Traders report that ample availability and low demand for VLSFO have capped any significant price increases in the port.
Tight VLSFO Availability in Singapore
In contrast, Singapore’s VLSFO price dropped by $7/mt, resisting the rise in Brent. Availability in Singapore remains tight, with lead times extending to 15 days, compared to 11 days in the prior week.
ENGINE recorded 15 VLSFO stems, with 14 lower-priced stems fixed for non-prompt deliveries, priced between $564-579/mt. Only one stem for prompt delivery was fixed at a premium of around $30/mt, contributing to the benchmark’s decline.
Biofuels Market Trends in Singapore
Singapore’s B24-VLSFO UCOME price dropped by $5/mt, while its B24-LSMGO UCOME price increased by $4/mt. Bio-blended bunker sales in Singapore surged in August, with 68,000 mt sold, up from 49,000 mt in July.
However, despite the rise in sales, spot demand for bio-bunkers remains low, according to two sources.
Rotterdam Biofuel Price Increase
Rotterdam saw an $8-9/mt increase in B24-VLSFO HBE and B24-LSMGO HBE prices over the past week. This rise is attributed to a $6/mt increase in the underlying ENGINE conventional VLSFO price and a $4/mt rise in the conventional LSMGO price.
Additionally, PRIMA’s POMEME CIF ARA price increased by $19/mt, adding upward pressure on biofuel benchmarks.
LNG Prices in Rotterdam Decline
Rotterdam’s VLSFO-equivalent LNG bunker price fell by $24/mt, driven by a decline in the front-month NYMEX Dutch TTF Natural Gas contract.
High gas storage levels in Europe, signaling ample supply, have contributed to the price drop.
Singapore LNG Prices Drop
Singapore’s VLSFO-equivalent LNG bunker price plummeted by $30/mt, partially due to the NYMEX Japan/Korea Marker (JKM) contract rolling over from the higher-priced October contract to the lower-priced November contract.
In addition, softening demand for LNG cargoes in Asian markets has further pressured the JKM benchmark.
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Source: Engine
