More shipments of natural gas are shifting away from China to Europe, as traders spend hundreds of thousands of dollars to take advantage of a rare price premium before it disappears.
According to data from shipping and analytics company Kepler, 13 LNG carriers ship their supplies primarily from the United States and West Africa to Europe instead of Asia.
This is also higher than about 8 ships spotted a week ago. In one case, merchants sent a ship through the Panama Canal, paying a $400,000 transit fee for a second time.
Vendors are rerouting tankers halfway around the world in an expensive turnaround, as Europe’s energy crisis has made the continent’s natural gas more expensive than Asia.
But with more shipments flowing into Europe to help ease the crisis, the arbitrage window is quickly closing, and shipments arriving in February may not last.
Matthew Ang, an analyst at Kepler, said LNG, which was originally scheduled to be delivered to Tianjin in northern China in January, is being diverted to other ports in Asia and Europe with demand slowing more than expected.
However, dealers said that Asian gas prices may also be affected by weak demand from China, especially with the cold weather in Northeast Asia.
The shift in shipments away from China also comes as factory activity declines ahead of the Lunar New Year holidays, and pollution restrictions take effect ahead of the Winter Olympics.