SINGAPORE- Asian spot prices of liquefied natural gas (LNG) stayed flat this week, breaking a losing streak of declines since mid-December, as buying interest kept prices from sliding further.
The average LNG price for May delivery into northeast Asia LNG-AS was $13.50 per million British thermal units (mmBtu), same as the previous week, industry sources estimated.
“In the broader Asia Pacific region, we’ve continued to see the ramping up of demand from certain countries and buyers that had been largely absent from the spot market through last year,” said Samuel Good, head of LNG pricing at commodity pricing agency Argus.
Tenders that have been issued this week include Indian Oil Corp’s request for cargoes to the planned Dhamra LNG terminal, Taiwan’s CPC seeking 14 cargoes over an 11-month period, and South Korea’s GS Energy seeking an early summer cargo.
“We’re also looking at the scope for new market entrants in the coming quarter, with an import project in Hong Kong and two in the Philippines scheduled to start-up in the period, followed by an import facility in Vietnam planned to start in the third quarter 2023,” Good added.
Prices are now down 81 percent from its record-high August 2022 levels and have shed over 50 percent so far this year, incentivizing demand from China and price sensitive markets like Bangladesh and India.
While Asian demand isn’t quite there to sustain bullish momentum, “we appear to have found a floor on the shoulder months – low-teens is expected now through to the third quarter,” said Toby Copson, global head of trading at Trident LNG.
In Europe, gas prices declined on Friday as healthy supply and lower demand helped to offset concerns over strikes in France against the government’s planned pension reform, which had entered a second week.
The three LNG terminals operated by Engie subsidiary Elengy are expected to remain blocked until March 21, while at least seven LNG ships heading to France have changed course since the strike started.
“A combination of strikes at French LNG import terminals, concerns for French nuclear output, and variable weather forecasts lifted European gas hub prices late last week, after the incremental falls seen in recent weeks,” said Argus’ Good.
“With the strikes at French LNG terminals, we’ve seen pipeline exports from France to neighboring markets ground to a halt and reverse in places, buoying underground gas withdrawals in France and lifting terminal sendout in these neighboring markets such as the Netherlands and Belgium.”
Additionally in Europe, gas consumption for power generation has begun to pick up, with TTF trading at the low end of the coal-to-gas switching range, said Lee Ken Kiat, an analyst at consultancy firm FGE. – Reuters
