Singapore Prices Climb Amid Heatwave, Rotterdam Steady

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Singapore’s LNG bunker price has increased significantly in the past week due to heightened demand driven by above-average temperatures in Asia, while Rotterdam’s price has remained steady. The price difference between the two ports has widened, with Singapore now at a $107/mt premium over Rotterdam. This surge is attributed to a heatwave causing higher electricity consumption and increased LNG demand for power generation in Asia. Meanwhile, Rotterdam’s slight price decline reflects stability in the European gas market, despite potential supply disruptions. The rising demand in key Asian markets is expected to tighten LNG supply, potentially reducing availability for bunkering in Singapore and exerting upward pressure on prices, reports Engine.

LNG Price Changes:

  • Rotterdam: Down by $1/mt to $680/mt
  • Singapore: Up by $9/mt to $787/mt

Rotterdam:

Rotterdam’s LNG bunker price has seen a minor decline of $1/mt, bringing it to $680/mt. This decrease aligns with a slight dip in the front-month NYMEX Dutch TTF Natural Gas benchmark, reflecting stability in the European gas market. Despite potential supply disruptions due to an outage at Norway’s Dvalin gas field and annual maintenance at the Karsto gas plant, the market has remained balanced. European gas stocks have continued to rise, now at 76% capacity, comparable to last year’s levels and above the five-year average of 66%.

Singapore:

In contrast, Singapore’s LNG bunker price has increased by $9/mt, reaching $787/mt. This rise is driven by higher NYMEX Japan/Korea Marker (JKM) prices, with the premium over Rotterdam widening to $107/mt from $97/mt last week. The surge is attributed to a heatwave across Asia, leading to higher electricity consumption and increased LNG demand for power generation. Weather forecasts predict a 70-80% chance of above-average temperatures in Japan and a 40% chance of average or above-average temperatures in South Korea until early July, which could further drive demand.

Outlook:

The high demand in key Asian markets is expected to tighten LNG supply, as suppliers prioritize deliveries to these regions. This could limit LNG availability for bunkering in Singapore, putting additional upward pressure on prices.

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Source: Engine