LNG Bunker Snapshot: Rotterdam premium rises as Singapore holds steady

Rotterdam's LNG bunker prices have risen, reversing a two-week downtrend. The premium over TTF has driven the increase, climbing from $2.48/MMBtu ($129/mt) to $2.62/MMBtu ($136/mt) and from $4.50/MMBtu ($234/mt) to $4.64/MMBtu ($241/mt) in the Baltics. European natural gas prices have been bolstered by efforts to replenish depleted stocks, as storage levels remain far below the seasonal average of 87%, according to ANZ Bank's senior commodity strategist Daniel Hynes.

However, rising Middle Eastern supply and concerns about winter shortages are keeping buyers wary. European gas storage is at its lowest level in 15 years, at just 72% full on October 2, up from 70% a week earlier and 14% lower than a year ago, reported Gas Infrastructure Europe. The EU may face intense competition from Asian buyers for cargoes.

Only 17 LNG vessels transited the Strait of Hormuz in September, compared to 87 in February, reflecting reduced activity due to geopolitical tensions. In Singapore, the LNG bunker price has remained relatively stable, with a smaller premium over ARA. The premium has narrowed from $147/mt to $134/mt. Singapore's price tracks the NYMEX Japan/Korea Marker (JKM), which has fallen by $6/mt to $1,337/mt.

The JKM decline has been partially offset by a higher bunker premium over the JKM, which rose from $4.31/MMBtu ($224/mt) to $4.41/MMBtu ($229/mt). However, weak Asian demand and Hormuz supply concerns have recently caused fluctuations. Chinese and Japanese LNG demand has been limited ahead of the winter heating season. Meanwhile, the shipping industry is increasingly turning to LNG-capable vessels.

MSC Cruises launched its first LNG-capable cruise ship, joining other shipping companies in this trend.