The UK tied with China for receiving the most US LNG cargoes in December, as tight European gas inventories, strong demand and robust netbacks incentivized more Gulf Coast supplies to be shipped across the Atlantic, S&P Global Platts Analytics data showed.

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The direction of trade flows has shifted several times over the last year amid extreme volatility in delivered prices, freight rates, inter-basin spreads and fundamentals in destination markets.

As the new year gets underway, many of the same dynamics remain in play. Specifically, weather and the timing of additional US supplies coming online will affect trade flows in the weeks and months ahead.

During December, the UK and China each received 11 LNG cargoes from the US. That marked a surge for the UK, which received two US cargoes the previous month, and a drop for China, where 16 US cargoes were delivered in November.

South Korea received the second most US LNG cargoes in December, with 10, followed by Turkey and Spain each with nine and Japan with eight. Brazil, which had received the most US LNG cargoes for three straight months before slipping to No. 3 in November, dropped further in December to sixth with five cargoes received during the month, Platts Analytics data showed.

Because of severe drought that drained its hydroelectric resources, Brazil was reliant in 2021 on LNG, particularly from the US, to help serve power demand. More than two-thirds of Brazil's electricity is generated by hydro.

In December, the focus for US FOB cargoes turned to Europe, as end-user prices surged to record highs.

During most of the second half of the month, the spread between the Platts JKM, the benchmark for spot-traded LNG delivered to Northeast Asia, and the Dutch TTF European gas hub was negative, signaling better economics for delivering US cargoes to Europe. The spread is often used as a sign of arbitrage potential between the Atlantic and Pacific basins. There were days during the latter part of the month when market sources reported Asia-bound cargoes being diverted to Europe.

Shipping rates, meanwhile, plunged. The Atlantic day rate fell about 75% from its high in December to $65,000/day at the end of the month, while the Pacific day rate dropped about 70% from its high during the month to $90,000/day Dec. 31.

LNG freight rates have fallen further since the start of January. TFDE time-charter rates stood at $85,000/day in the Pacific basin and $60,000/day in the Atlantic basin Jan. 5.

On Jan. 5, Platts assessed DES Northwest Europe for February up $2.707/MMBtu day on day at $30.687/MMBtu. Platts assessed the Gulf Coast Marker for February at $28.70/MMBtu, up $2.65/MMBtu day on day as US FOB cargo values tracked European prices.

The maximum wait Jan. 5 for unreserved LNG tankers transiting the Panama Canal was three days northbound toward the Gulf of Mexico and three days southbound toward the Pacific Ocean, according to the Panama Canal Authority.