Latest News

Asian spot LNG costs at 10-week short on weak need, moderate weather

Asian spot liquefied natural gas (LNG) rates fell this week to its most affordable level in 10 weeks in the middle of mild weather condition and strong storage stocks.

The typical LNG rate for February shipment into north-east Asia << LNG-AS > was at $13.30 per million British thermal units ( mmBtu), its least expensive level because mid October and down from somewhat lower than $14.50/ mmBtu recently, industry sources approximated.

The market is fairly comfy in instant supply/demand terms. China seems well-stocked and Japan is bringing some brand-new nuclear plants back in coming weeks, said Alex Froley, senior LNG analyst at information intelligence company ICIS.

Given typical weather and an absence of supply shocks, the conditions could be in location for prices to start a sluggish slide over the very first quarter of 2025, similar to in 2015, Froley included.

Samuel Good, head of LNG pricing at Argus, stated the easing of Asian rates was due to weak downstream consumption in the face of moderate weather and was satisfied by a spate of cargo deals.

Both Beijing and Seoul are anticipated to have mostly above-average daily minimum temperatures for the end of this month and through January. Nevertheless, Tokyo was set for continued cooler weather condition throughout the period which might support Japanese terminal throughput in the coming weeks, Good stated.

In Europe, gas costs rose this week as unpredictability stays over Russian gas flows to Europe with the end of the Ukraine gas transit offer looming.

Russia's pipeline streams through Ukraine will stay a secret focus of attention for traders across the vacation duration, ICIS' Froley said.

Florence Schmit, a European energy strategist at Rabobank, said that Russian circulations through Ukraine is unlikely to resume in the first quarter of 2025, leaving Europe more exposed to higher LNG import need in the new year.

As the quantity of gas that will need to be changed is little, real concern about supply availability is restricted. Demand in Asia and the pace of Europe's gas storage withdrawals will be key in identifying which market will become the premium market in Q1, she added.

S&P Global Product Insights assessed its everyday North West Europe LNG Marker (NWM) price criteria for cargoes provided in February on an ex-ship (DES) basis at $12.967/ mmBtu on Dec. 19, a $0.20/ mmBtu discount to the February gas price at the Dutch TTF hub.

Argus assessed the price at $12.990/ mmBtu, while Spark Products assessed the cost for January delivery at $ 12.913/ mmBtu.

The U.S. arbitrage to north-east Asia through the Panama Canal is presently also signalling U.S. cargos are incentivised to provide to Northwest Europe, said Glow Commodities expert Qasim Afghan.

In LNG freight, Atlantic rates rose for the fourth week going to $23,500/ day on Friday, while Pacific rates rose to $22,000/ day, Afghan included.

(source: Reuters)