By Clyde Russell
LAUNCESTON, Australia- The merry-go-round of liquefied natural gas (LNG) between Europe and Asia appears to be tilting back toward Asia as buyers in the top-consuming region start to chase cargoes ahead of the summer demand peak.
The dynamics of the LNG market for the first four months of the year was that Europe was prepared to bid up prices for spot cargoes in order to secure supplies.
This competition for LNG came as Europe first battled a winter shortage of natural gas, and then was blindsided by Russia’s invasion of Ukraine and the sudden specter that it would lose volumes from its biggest supplier.
The January to April period saw Europe’s imports of the super-chilled fuel at record levels, with Refinitiv data showing the first months of 2022 were the strongest on record.
January’s imports were 11.94 million tons, February’s 10.39 million, March came in at 11.15 million and April at 11.79 million, giving a four-month total of 45.27 million tons.
This was up 58 percent from the 28.61 million tons of imports in the first four months of 2021.
However, Europe’s May imports are expected to be around 10.96 million tons, according to Refinitiv, which would be the weakest this year on a per day basis.
In contrast, Asia’s imports of LNG are poised to show some recovery in May, with Refinitiv forecasting arrivals of 20.46 million tons, up from 19.82 million in April.
For the first four months of 2022, Asia’s imports were 88.05 million tons, down 8.9 percent on the 96.68 million recorded in the same period in 2021.
The main drag on Asia’s LNG imports has been China, which last year claimed the title of the world’s biggest importer from Japan.
China’s imports were 21.59 million tons in the first four months of the year, according to customs data, a decline of 17.3 percent from the same period last year.
However, there are emerging signs of renewed interest from Chinese buyers, with Refinitiv estimating May’s arrivals will be 5.39 million tons, which would be the most since January.
With Europe’s natural gas storages largely replenished and Russian pipelines supplies still flowing, it’s likely that the continent will pare back its LNG purchases in coming months.
