July 5 (Lloyd's List) - LNG bunker prices in Rotterdam switched back to a discount against very low sulphur fuel oil on July 4, having remained at a premium over the past six weeks, as VLSFO values tracked crude futures higher and LNG values fell because of weaker Asian demand.

Rotterdam LNG bunker prices fell to a seven-week low at $553 per tonne on July 4, switching to a $21 discount on VLSFO, compared with a $41 premium recorded in mid-June, according to price reporting agency Argus Media.

LNG bunker values in Rotterdam had moved to a premium to VLSFO on May 23 for the first time since the first week of January, having averaged a discount of $54 in the year to date, compared with a premium of $105 in the same period in 2023, Argus data shows.

The recent fluctuation in LNG bunker prices was a result of cargo market fundamentals, according to Samuel Good, head of LNG pricing at Argus.

“LNG bunker prices for northwest Europe mostly follow at a premium to the benchmark Dutch TTF gas hub. The rally by LNG cargo prices earlier in the year was driven unplanned liquefaction terminal maintenance, as well as hot weather and otherwise strong demand in Asia,” Good said.

“But prices have slipped back as Asian demand has waned in the face of high prices, while European underground gas stocks have continued to rise at a sufficient pace buffeted by a rise in Norwegian gas output and sustained weak downstream gas demand across the region,” Good added.

Rotterdam VLSFO prices reached a two-month high of $578 on July 2, driven by rising crude futures.

Rotterdam’s LNG marine fuel sales through the first quarter reached 215,000 cu m (97,000 tonnes), up 150% on the year from 86,000 cu m recorded in January-March 2023, according to the port authority.

Meanwhile, LNG bunker values kept a wide discount to VLSFO in Singapore at $84 on June 28, continuing this year’s trend, according to Argus data.

Cheaper LNG prices have buoyed bunkering demand from the growing dual-fuel fleet in Singapore. LNG bunker sales in Singapore rose to 160,000 tonnes in January-May this year, compared with 111,000 tonnes in all of 2023, according to the Maritime and Port Authority of Singapore.

LNG prices could rebound after summer, as demand typically picks up during the northern hemisphere’s cooler months.

Forward LNG prices also point to a potential rise in values through the end of summer and into early winter, according to Argus.

LNG bunker demand could also rise in the second half of 2024, as more dual-fuel vessels hit the water. The number of dual-fuel LNG vessels will rise by 85 in 2024 to reach 557, with orders placed for a further 500, according to DNV.