Next: Asia spot LNG: Jan JKM falls 10 cents/MMBtu as demand stalls
The Platts JKM for spot LNG deliveries into Northeast Asia in January ended the trading week at £7.05/MMBtu Friday, down 10 cents on the week, due to tepid demand from end-users. After recent deals, with Taiwan’s CPC having bought two or three cargoes for December and January in a tender, and some demand from Japanese buyers heard to have been covered, demand in the North Asian region started to weaken. “Most end-users have already secured their requirements, so they are not in a hurry to buy additional volumes,” an east Asian end-user told Platts.
At the same time on the supply side, expected additional availability was heard from Gorgon LNG in Australia, as well as the US Gulf. Reloads out of Europe were also being discussed, given the wide spread between onshore gas prices and delivered LNG prices in Asia, but had yet to materialize, given a lack of available shipping in the Atlantic. Despite the lack of demand, sellers were not actively lowering offers to chase bids in an effort to increase trading opportunities.
Sellers were instead relying more on the demand from open buy tenders to sell their cargoes. Also, potentially providing some support to the prices was the cold front that affected North Asia over the week, and could lead to some additional demand emerging due to faster than expected drawdowns of inventory. In the Atlantic, the winner of the most recent tender by Angola LNG was heard to be Trafigura.
The tender was heard awarded in the high £6s/MMBtu and the cargo is aboard the Sonangol Benguela, currently sailing towards Spain’s Sagunto terminal, according to S&P Global Platts trade flow software cFlow. In India, Gail had issued a new tender on November 25 for a single cargo delivered in January. This follows a similar tender which closed and was not awarded last week by the utility, seeking two DES cargoes for delivery over January and February to Dahej.
The earlier tender was heard to had been canceled due to bids received being above expectations. In the Middle East, there were reports that Egas had awarded its buy tender, which closed November 6 with validity of 21 days, but only 59-69 of the 108 cargoes sought had been awarded. Trafigura and Glencore were each heard to have each been awarded 20-25 cargoes, while Noble and Glencore were heard to have won seven cargoes each.