off-the-wire

GLOBAL LNG-Asian spot prices remain at 21-month low

Kitco Media
By Reuters
Published:
Updated:
Reuters
By Marwa Rashad LONDON, April 6 (Reuters) - Asian spot liquefied natural gas (LNG) prices remained flat this week at the lowest level since July 2021 on muted demand and solid inventories in China, Japan and Korea. The average LNG price for May delivery into northeast Asia was $12.50 per million British thermal units (mmBtu), unchanged from the previous week, industry sources estimated. Prices have fallen 55% year-to-date and more than 82% from the August 2022 peak of $70.50/mmBtu. "North Asian demand drivers are still errant, even for off- season speculative cargos. Pricing seems to be driven by sentiment correlated with euro hub markers," said Toby Copson, global head of trading at Trident LNG.


"I expect we will trade in this narrow range while we sit in shoulder season - until some impetus emerges for utilities as Chinese and Korean storage seems topped up," he added.


Tobias Davis, head of LNG Asia at brokerage Tullett Prebon, said the market has seen "fresh bouts of demand" from Thailand's PTT which lifted around 10 cargoes at $12-$13/mmBtu and is tendering for more volumes for May-September, while the Philippines secured its first LNG import cargo from Vitol and Indian end-users continue to pick prompt volumes. "Prices below $13/mmBtu continue to deter China, which remains quiet and on the sidelines with opportunistic bids, while healthy storage in Japan and Korea continue to keep that all important end-user demand at bay," Davis added. Europe is still a favourable destination for cargoes, despite a series of strikes in France that have reduced the country's LNG imports by around one million tonnes in March, as
cargoes have been diverted to neighbouring terminals.


Ken Kiat Lee, senior analyst at consultancy firm FGE, said that despite Europe's colder start to the shoulder season - the months after winter and ahead of summer - prices have continued to trade sideways with most markets sitting on above-average gas inventories.


S&P Global Commodity Insights assessed its daily north-west Europe LNG Marker (NWM) price benchmark for cargoes delivered in March on an ex-ship (DES) basis at $12.374/mmBtu on April 5, a $1.90/mmBtu discount to the May gas price at the Dutch gas TTF hub, according to Allen Reed, managing editor of Atlantic LNG. Reed said that the spread between European gas and LNG
prices hit a multi-month high on April 4 - at a $2.20 discount to Dutch gas prices for May - and was largely driven by strikes at French LNG terminals. LNG spot freight rates have fallen amid softer gas prices and potential sub-charters entering the market, with Atlantic rates at $42,000/day on Thursday and Pacific rates at $62,750/day, according to Edward Armitage, an analyst at Spark Commodities.

(Reporting by Marwa Rashad; Editing by Nina Chestney)

Messaging: marwa.rashad.thomsonreuters.com@reuters.net))
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.