Asia LNG prices reverse declining trend on Japanese demand

Asian spot prices for liquefied natural gas (LNG) edged higher this week, reversing the declining trend of recent weeks due to renewed appetite for spot cargoes, but unsold cargoes capped gains, traders said.

Spot prices for December delivery into North Asia were estimated at $10.30 per million British thermal units (mmBtu), up 10 cents from a more than twomonth low struck over the past two weeks.

Japanese power utility Kansai Electric Power Co was seeking two cargoes for delivery in December, while Japan’s Tohoku Electric Power Co Inc was seeking a cargo for delivery over December 25 to December 30, traders said.

Kansai could have purchased at least one cargo at $10 to $10.30 per mmBtu, while Tohoku may have received lowest offers for its cargo requirement in the range of $10.60 to $10.70 per mmBtu, they added.

Japan’s Nippon Steel & Sumitomo Metal had been sounding out the market about a potential spot purchase for delivery in the second half of December to January, one trader said.

The temperature in Tokyo is expected to dip below average next week and also in Beijing in two weeks, weather data from Refinitiv Eikon showed.

Demand from South Asia was also seen with tenders emerging from India and Pakistan.

Essar Steel India sought an LNG cargo on a delivered exship (DES) basis for delivery into Dahej over December 28-29 on LNG trading marketplace Global LNG Exchange (GLX) this week but failed to attract sellers.

Pakistan State Oil returned to the spot market after several months hiatus, seeking three cargoes for delivery in January and February.

Still, high freight rates for LNG tankers are curbing demand, after hitting $200,000 a day, exceeding a 2012 peak of $180,000 a day. There were still several unsold cargoes in the spot market, which kept a lid on prices, traders said.

Australia’s Ichthys LNG project has shipped its second and third LNG cargoes, Refinitiv Eikon shiptracking data showed.

LNG tanker Gaslog Skagen loaded from the Ichthys LNG plant on October 28 and discharged the cargo into the Guangxi LNG terminal in China on November 7, the data showed.

The tanker Marvel Eagle loaded LNG from the plant on November 3 and is due to arrive in Yeosu, South Korea on November 16, according to the data