The @Spark Commodities Spark30S Atlantic LNG freight assessment collapsed to $9k/day on 24 August, the lowest reading on record for this time of year. Loaded volumes show little variation over recent weeks, which makes this primarily a routing story rather than a supply one: Atlantic Basin cargoes are increasingly netting back to Europe over Asia, shortening average tonne-mileage and pressuring freight rates lower.
This growing pull from Europe on LNG can also be seen elsewhere. Absolute European prices are climbing as Europe looks to outbid Asian LNG buyers, while the DES NWE – TTF spread has widened since early August, a sign of increasing appetite for regasification slots needed to accommodate growing volumes of LNG coming into Europe.
Europe is thus seemingly racing to rebuild storage from depleted levels, despite a still-backwardated curve, with buyers potentially looking to capture growing winter upside risk. Even with a late winter delivery boost Europe is set to enter the season with its thinnest buffer in over a decade.
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