Pacific LNG Freight Rates Rise, European Prices Decline

Pacific spot liquefied natural gas (LNG) freight rates increased this week, while European prices declined compared to the previous week. Last week, spot charter rates rose slightly in both basins.

Freight Rate Trends

After nine weeks of significant freight rate increases, the Spark30s Atlantic rates decreased by $1,250 to $88,250 per day this week, according to Qasim Afghan, Spark’s commercial analyst. In contrast, the Spark25S Pacific rates saw a $4,500 increase this week, rising to $56,750 per day, the highest Spark25S rate since February.

European LNG Price Movements

In Europe, the SparkNWE DES LNG front month price for August delivery decreased compared to the prior week. The SparkNWE DES LNG front month price is assessed at $9.755/MMBtu, with a $0.165/MMBtu discount to the TTF, marking a $0.656/MMBtu week-on-week decrease, the largest in 11 weeks. Data from Gas Infrastructure Europe (GIE) shows that gas storage volumes in the EU continued to rise, reaching 80.09% full on July 10, up from 78.10% on July 3 and 80.04% on the same date last year.

Asian LNG Market Dynamics

In Asia, the Japan Korea Marker (JKM) for LNG cargoes delivered to Northeast Asia settled at $12.365/MMBtu on Thursday, down from $12.485/MMBtu the previous Friday. The front-month JKM dropped to $12.390/MMBtu on Monday, $12.365/MMBtu on Tuesday, and $12.350/MMBtu on Wednesday. According to a report by the Japan Organization for Metals and Energy Security (JOGMEC), the JKM price was on a downward trend last week due to low demand, as Japan and South Korea had already procured the necessary cargoes for the summer season, while India’s electricity demand was significantly reduced by the monsoon.

South Korean LNG Demand

Despite the overall trend, South Korean private LNG importers have entered the spot market to prepare for potentially higher power demand this summer. Over the past two weeks, three importers purchased approximately five cargoes for August shipments, driven by competitive prices, as JKM prices approached $12/MMBtu, slightly below the wholesale gas prices of state-run Kogas.

Komipo Tender Announcement

Korea Midland Power (Komipo) has issued a tender inviting bids for one spot LNG shipment for delivery in September. Komipo is seeking 3.2-3.8 trillion British thermal units (TBtu) of LNG on a delivered ex-ship (DES) basis, with a delivery window of September 26-27 at a Kogas-operated LNG import terminal in South Korea. The tender deadline is July 17 at 16:30 Singapore time.