“Global LNG freight rates hit record lows this week, with the Spark30S (Atlantic) assessment dropping $11,000 to $9,000 per day – the lowest rates on record for a 174 2-stroke vessel,” Qasim Afghan, Spark’s commercial analyst.
“This has largely been driven by increased vessel availability, due to the increased influx of newbuilds entering the market, as well as US spot cargoes heavily incentivized to deliver to Europe, and thus stay within the Atlantic basin, after the recent TTF rally,” he said.
He said Pacific freight routes have largely followed suit, with the Spark25S (Pacific) assessment dropping $3,250 to reach a record low of $15,500 per day.
In Europe, the SparkNWE DES LNG increased compared to $13.664/MMBtu last week.
“The SparkNWE DES LNG front month price for February delivery rose by $0.930 to $14.594/MMBtu this week,” Afghan said.
He said this was driven by the recent TTF rally which saw the SparkNWE DES LNG price reach its highest point of $14.909 earlier this week.
“The discount to the TTF widened for a fourth consecutive week, widening by $0.08 to -$0.375/MMBtu and indicating increased demand for LNG delivery slots in NW-Europe,” Afghan said.
Moreover, “the US arb to NE-Asia (via the Cape of Good Hope) for February widened by $0.517 to -$1.368/MMBtu, strongly signaling that US cargos are incentivized to deliver to Europe instead of Asia,” he said.
“The Qatar front month arb to NE-Asia has closed out for the first time in almost 2 years, pricing in at -$0.076/MMBtu and indicating that yet another major global LNG supplier is incentivized to direct their cargos to Europe instead of Asia,” Afghan said.
Source: pecosoperating
