JAPAN, CHINA DIP
The higher demand from South Asia wasn't enough to offset
declining purchases by Japan, which last year reclaimed its
title as the world's biggest LNG buyer from China.
Japan's April imports were assessed at 5.16 million tonnes,
down from 5.57 million in March, and the weakest month since
October last year.
However, it's worth noting that Japan's LNG imports
typically follow a seasonal pattern, rising for winter and
summer and tailing off in the shoulder seasons between these
demand peaks.
China's LNG imports have yet to show any meaningful
recovery, despite signs of stronger energy demand in the world's
second largest economy.
April imports were 5.23 million tonnes, down from March's
5.48 million, but up from 4.99 million in February.
It's also worth noting that China's April performance was an
increase from the April last year, when 4.61 million tonnes were
imported.
The lower spot price may well encourage higher imports of
LNG by China, although in the past volumes have only picked up
significantly when the spot price dips below $10 per mmBtu, as
this allows LNG to be competitive in China's domestic markets.
Similar to China, it will probably take even lower spot
prices to meaningfully boost imports by India and other South
Asian nations.
The opinions expressed here are those of the author, a columnist
for Reuters.
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GRAPHIC-LNG imports by Asia, Europe vs spot Asia price: ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
(Editing by Sonali Paul)
(The opinions expressed here are those of the author, a
columnist for Reuters.)
By Clyde Russell
LAUNCESTON, Australia, May 2 (Reuters) - Asia's imports
of liquefied natural gas (LNG) fell in April as major buyers
China and Japan trimmed purchases, offsetting small gains among
South Asian countries.
The total volume of the super-chilled fuel imported was
20.86 million tonnes in April, down from March's 22.23 million
and 22.19 million in February, according to data compiled by
commodity analysts Kpler.
At the same time that volumes were slipping in Asia, Europe
was buying more LNG, with imports rising for a third straight
month in April, reaching 12.50 million tonnes, the most since
December.
Europe's LNG demand has shifted structurally higher as
pipeline supplies from Russia were curtailed in the wake of
Moscow's invasion of Ukraine in February last year.
However, the healthy state of European gas inventories does
raise the possibility that LNG imports will steady or drop
somewhat in coming months as utilities pare purchases for
stock-building.
Conversely, Asia's LNG purchases may increase as
price-sensitive buyers such as India and Pakistan ramp up
imports amid a declining spot price.
The price of spot LNG for delivery to north Asia dropped to $11.05 per million British thermal units (mmBtu) in
the week to April 28, the lowest since June 2021.
The spot price has now slid 71% since its northern winter
peak of $38 per mmBtu in mid-December, and is down 84% from its
record high of $70.50, reached in late August as European
utilities scrambled to source enough gas to cover the winter
demand peak.
Even though the spot price has dropped considerably from its
peaks, it's worth noting that it is at the upper end of the
$1.80 to $11.60 per mmBtu range that persisted from the start of
2015 to December 2020.
This means that while the price is now low enough to tempt
buyers that had withdrawn from the market during last year's
surge, it's still at a level that wouldn't be considered a
bargain.
Nonetheless, Indian utilities are coming back into the
market, with Kpler estimating April imports of 1.98 million
tonnes, up from 1.84 million in March and the most since May
last year.
Pakistan imported 650,000 tonnes in April, up from 570,000
in March and the highest monthly total since the 660,000 in
January.
Imports by Bangladesh were assessed at 490,000 tonnes in
April, up from 450,000 in March, with these past two months
being the strongest since June 2022.
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