Spot LNG Shipping Rates Stabilize, European Prices Decline

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  • Spot charter rates for the global liquefied natural gas (LNG) carrier fleet remained almost flat this week, while European and Asian prices experienced a decline compared to the previous week.
  • Despite a slight increase in the Spark25S Pacific rate, overall freight rates remained stable.
  • European LNG prices for March delivery reached an eight-month low, reflecting a decrease in demand due to the Lunar New Year in China and Korea.
  • Gas storage levels in Europe remain high for this time of the year, influenced by mild weather.

Spot LNG Shipping Rates Stability

Spot charter rates for the worldwide LNG carrier fleet showed minimal fluctuations this week. The Spark30S Atlantic rate held steady at $54,500 per day, while the Spark25S Pacific experienced a marginal increase of $500 (1 percent), reaching $58,000 per day. The stability in freight rates follows a previous week’s rise, attributed to the US arbitrage to NE-Asia and extended voyage times resulting from Suez Canal diversions.

European LNG Prices Decline

European LNG prices witnessed a dip, with the SparkNWE DES LNG front month for March delivery reaching a new eight-month low. The price was assessed at $7.339/MMBtu, marking a $0.833/MMBtu decrease from the previous assessment. The price also showed a $0.065/MMBtu narrowing of the discount to the TTF (Title Transfer Facility). This decline is attributed to high gas storage levels in Europe due to mild weather conditions.

Asian Prices and Demand Factors

Prices for LNG cargoes delivered to Northeast Asia, represented by the JKM index, dropped this week. JKM for March settled at $9.347/MMBtu, reflecting decreased demand during the Lunar New Year in China and Korea. The Japan Organization for Metals and Energy Security (JOGMEC) reported a decline in JKM as demand tapered off. Japan’s LNG inventories for power generation also increased, standing at 2.29 million tonnes as of February 4.

Storage Levels and Market Dynamics

Gas storage levels in the European Union remained relatively high, reaching 65.94 percent full on February 14. Mild weather conditions have contributed to sustained storage levels. The stability in global LNG shipping rates and the decline in European prices coincide with a period of reduced demand for Asian manufacturing, influenced by the Lunar New Year slowdown. The dynamics in LNG prices and shipping rates continue to be influenced by global market conditions and regional factors.

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