The average LNG price for May delivery into northeast Asia was $13 per million British thermal units (mmBtu), down 50 cents, or 3.7%, from the previous week, industry sources estimated. Prices have fallen 53% year-to-date and around 81% from the August 2022 peak at $70.50/mmBtu. "Demand from northeast Asian buyers still remains broadly weak, with few end-users needing to step into the spot market for additional prompt supply," said Samuel Good, head of LNG pricing at commodity pricing agency Argus. He added that traders, however, are looking at the potential for any third-quarter demand that could emanate from China, where demand is expected to pick up on rising economic activity following the lifting of strict COVID lockdowns in December. In Europe, gas prices rose on Friday due to firm demand and as industrial action protesting against pension system changes in France affected operations at nuclear plants and LNG terminals. European gas prices had also been supported by mildly colder weather and less wind.
"A conflicted market to end the week, Europe showing some
upside potential which would ordinarily pull Asia up with it.
However, recent prompt tender rates have been lower than
expected for delivered terms, coupled with a lack of any real
demand for North Asia," said Toby Copson, global head of trading
at Trident LNG.
"I'd have to say short-term bearish outlook on Asian pricing
until some demand driver emerges."
The market has also continued to eye the potential for
production issues across several Atlantic basin liquefaction
terminals, added Argus's Good, including at Freeport LNG in the
United States and Angola LNG.
Angola's only LNG project had recently cancelled tenders due
to production issues at its plant, according to trading sources
this week, while a company spokesperson said the plant is
currently operating at reduced rates.
Meanwhile, the second biggest U.S. LNG export plant,
Freeport, had cancelled up to four shipments of LNG due to
restart snags after an eight-month-long outage, trading sources
told Reuters.
S&P Global Commodity Insights assessed its daily north-west
Europe LNG Marker (NWM) price benchmark for cargoes delivered in
May on ex-ship (DES) basis at $12.334/mmBtu on March 24, a
discount of $1.475/mmBtu to the May gas price at the Dutch gas
TTF hub, said Allen Reed, managing editor, Atlantic LNG.
"The price of delivered LNG into Northwest Europe hit a
21-month low of $11.226 on March 20 as winter ended alongside
strong natural gas inventories," said Reed. "The price has
remained depressed alongside the extension of strikes at French
LNG terminals."
Argus' assessment for Northwest Europe DES LNG price was at
$12.70/mmBtu on March 23.
On LNG spot freight, rates declined $6,250/day in both the
Atlantic and Pacific basins since last Friday, said Eleni
Balomenou, analyst at Spark Commodities. Atlantic rates fell
below $50,000/day, the lowest since August 2022, while Pacific
rates also declined to $71,500/day.
(Reporting by Emily Chow; Editing by Maju Samuel)
