LNG bunker prices have risen in Rotterdam and Singapore, while higher demand has put pressure on bunker slot availability, particularly in Singapore.
Changes in weekly LNG bunker prices:
- Rotterdam up by $11/mt to $554/mt
- Singapore up by $13/mt to $652/mt
Rotterdam
In Rotterdam, the price of LNG bunker fuel has increased by $11/mt in the past week, reflecting a gain in the benchmark TTF (Title Transfer Facility) price.
This price increase occurred despite record post-winter gas storage levels and has defied concerns about oversupply in the European gas market. Increased competition from Asia has contributed to rising prices in Rotterdam, a report from Denmark Energi said.
The recent TTF benchmark hike can also be attributed to a Russian strike on a Ukrainian gas storage facility, leading to fears of gas supply disruptions. However, the impact on fundamentals should be limited as stocks are still very high in Europe, LNG business analyst at Poten & Partners Irwin Yeo told ENGINE.
LNG is in good availability and has been offered by bunker 3-4 suppliers in Rotterdam, which is rare in the market and added some downward pressure on bunker delivery costs, a source said.
Rotterdam has historically been known for lower LNG bunker delivery costs than other locations like Singapore. A slight delivery cost increase is expected in Rotterdam this month, but its delivery costs are still expected to be around a third lower than in Singapore, a trader told ENGINE.
Singapore
Singapore’s LNG bunker price has risen by $13/mt over the same period. This price increase is influenced by factors such as the JKM (Japan/Korea Marker) price and market trends in the Asian LNG market.
Some Asian importers have been reluctant to purchase spot volumes now after the JKM price has come up in recent weeks.
Fuel switching has become more prevalent in Asia as LNG outcompetes VLSFO and LSMGO in price. Tankers are actively engaging in fuel-switching strategies based on market conditions and price differentials, a trading source told ENGINE. HSFO is still the cheapest option for vessels with scrubbers fitted, however.
Several US LNG exporters are considering sending shipments to Europe rather than to Asia due to current price differentials and longer shipping distances, Rystad Energy said in a note.
Such a shift in cargo flows could support LNG bunker prices in Singapore and the wider Asian market.
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Source: Engine
