Spot LNG Shipping Rates Drop, European Prices Climb

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  • Global LNG spot charter rates continue to decrease this week, while European LNG prices rose compared to the previous week.
  • Spot rates in both the Atlantic and Pacific basins are at their lowest in four years, with various factors such as avoiding the Suez Canal and lower Panama Canal transits affecting rates.

Spot charter rates for global liquefied natural gas (LNG) carriers continued to decrease this week, marking the third consecutive week of decline. According to Spark’s commercial analyst Qasim Afghan, the Spark30S Atlantic spot rate dropped to $43,750 per day, and the Spark25S Pacific rate fell to $46,750 per day. These rates represent the lowest levels in four years for this time of year.

LNG freight rates remain low despite LNG carriers avoiding the Suez Canal due to the situation in the Red Sea and lower LNG transits in the Panama Canal caused by drought conditions. The Panama Canal Authority plans to gradually ease transit restrictions if steady rainfall arrives as forecasted.

European LNG Prices on the Rise

European LNG prices increased significantly compared to the previous week. The SparkNWE DES LNG front-month price for May delivery was assessed at $8.992/MMBtu, reflecting a notable weekly increase and the highest price in three months. This price is driven by the need for Europe to compete for cargoes at higher prices, as the arbitrage to send cargo to Asia for US volumes remains open.

Gas storage levels in Europe remain high, with EU-27 ending the winter with record-high stocks. Gas Infrastructure Europe (GIE) data shows that storages were 61% full as of April 10, up from 55.98% on April 10 of last year.

Impact of US LNG Exports and Freeport LNG Terminal

US LNG exports decreased in the week ending April 10 compared to the previous week. The Freeport LNG terminal in Texas still operates with only one train. Reports suggest that the third train tripped offline due to a flow meter issue on April 9 and came back online on April 10.

Supply concerns raised Atlantic LNG prices on April 11 due to the outage at Freeport LNG and Russian attacks on gas storage sites in Ukraine. Platts assessed the DES Northwest Europe Marker for May at $9.044/MMBtu and the Gulf Coast Marker at $8.42/MMBtu.

JKM Prices Slightly Up

The JKM (Japan-Korea Marker) price for LNG cargoes delivered to Northeast Asia increased slightly this week. JKM for May settled at $9.610/MMBtu on Thursday. Japan’s Organization for Metals and Energy Security (JOGMEC) noted that the price trended lower mid-week due to weak demand but was offset by active trading due to demand for inventory injections, particularly in Japan.

Japan’s LNG inventories for power generation stood at 1.60 million tonnes as of April 7, up from the previous week.

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Source: LNG Prime