Global LNG Asia spot prices fall from eight-month high on weaker demand
SINGAPORE, Aug 23 (Reuters) – Liquefied natural gas (LNG) spot prices in Asia fell this week from more than eight-month highs on weaker spot demand and lower European gas prices.
Industry sources estimated the average price of LNG for delivery to Northeast Asia in October was $13.80 per million British thermal units (mmBtu), down from $14.10/mmBtu last week.
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Rising prices are limiting purchases from some importers in the region even as sweltering temperatures in the region boost gas consumption for power demand. LNG prices in Asia could continue to fall next week, said Ana Subasic, a natural gas and LNG analyst at data and analytics firm Kpler.
“There may be some spot demand in Japan and South Korea due to high gas consumption in the power sector, but price-sensitive buyers in South and Southeast Asia are expected to hold off on purchases until prices fall,” she said.
“Recently, buyers from India and Thailand have failed to win spot tenders,” she added.
The price drop comes despite a supply disruption this week at one of the two trains at the Ichthys LNG plant in Darwin, Australia, marking the second outage in the past month.
In Europe, S&P Global Commodity Insights on August 22 assessed the daily price benchmark for Northwest Europe LNG Marker (NWM) for cargoes delivered on an October Ex-Delivery-Express (DES) basis at $12.047/mmBtu, $0.15/mmBtu lower than the October gas price at the Dutch TTF hub.
Argus valued this at $12.00/mmBtu and Spark Commodities valued the September price at $11.794/mmBtu.
European gas prices fell on Friday due to cooler temperatures and weak renewable generation. Temperatures across Europe are also expected to cool this weekend, Kpler's Subasic said, adding that strong renewable generation is likely to reduce the need for gas-fired power generation.
Meanwhile, U.S. feed gas flows are stable, and regulatory filings show that Corpus Christi Phase 3 and Plaquemines are on track to receive first feed gas and produce first LNG on schedule, according to Samuel Good, head of LNG pricing research at commodity price research firm Argus.
For LNG freight rates, Atlantic freight rates fell for the second straight week to $61,500 a day on Friday, according to Spark Commodities analyst Qasim Afghan. This was the biggest weekly drop in more than a month and a drop of more than $15,000 in the past two weeks, he added.
Pacific rates also fell, easing to $78,750 per day.
(Reporting by Emily Chou and Sonia Cheema)
