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Asian LNG Spot Prices Ease From Seasonal High

Asian LNG Spot Prices Ease From Seasonal High
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Πεμ, 19 Δεκεμβρίου 2013 - 17:36
Asian spot liquefied natural gas prices have eased after touching a seasonal peak in early December but are expected to remain high through February on firm winter demand.
Asian spot liquefied natural gas prices have eased after touching a seasonal peak in early December but are expected to remain high through February on firm winter demand.

The spot LNG price in Asia had touched a high of $19.50 per million metric British thermal units in early December, but price assessments for February have slipped to around $18.90 per mmBtu and for March to around $18.20 per mmBtu, traders and analysts said. LNG spot prices in Asia normally average around $16 per mmBtu.

"Tightness will persist well into 2014 and be particularly acute during winter months, especially when multiple LNG-consuming regions are showing below-normal temperatures," New York-based energy consulting firm PIRA Energy Group said in a statement.

High LNG prices in Asia typically draw in LNG cargoes from other regions like Europe as arbitrage players redirect supply toward consumers in Asia and profit from the price difference.

The European LNG spot price is currently around $13.40 per mmBtu, and the arbitrage window is wide open. But the availability of spot cargoes in Europe is close to zero as high power prices incentivize domestic consumption, DNB Markets said in a note.

Japan, the world's largest LNG importer, imported 41.2 million tons of LNG in the April-September period, down 2.8% from a year earlier on lower fossil fuel consumption, according to the Tokyo-based Institute of Energy Economics.

In the April-September period, Japan imported 22% of its LNG from Australia , amounting to 8.9 million tons, and 10% from Russia , amounting to 4.2 million tons, the IEEJ said in its monthly newsletter.

Japan typically gets around a third of its LNG imports from Southeast Asian countries like Malaysia and Indonesia , and the remaining supply comes from the Middle East , Australia and Africa .

Additional demand from new import terminals in China and the supply situation in the Atlantic Basin are likely to drive the Asian spot market in the next few months, the IEEJ said.

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