Asian spot liquefied natural gas (LNG) prices rose this week on as Japan, South Korea and India sought to replenish their stocks.
The increased competition has accordingly narrowed the spread with European gas prices, which eased on less concerns over further Russian supply cuts.
The average LNG price for July delivery into northeast Asia was estimated at $24.75 per metric million British thermal units (mmBtu), up $1.35 or 5.8% from the previous week, industry sources said.
“The market has been a little more stable recently compared with the volatility of earlier months, although still at high prices,” Alex Froley, an LNG analyst at data intelligence firm ICIS said.
In China, market players are waiting to see if Covid-19 lockdown easing will help demand.
China LNG Imports Down
China’s LNG imports until end-May were down by 6.5 million tonnes, or 20% from the previous year, equalling some 9 billion cubic metres of pipeline gas, Froley noted.
Major purchases by large South Korean and Japanese utilities have occurred in the meantime, according to S&P Global Commodity Insights.
LNG freight spot rates continued to rise as vessel availability tightens, with Pacific rates estimated at $85,000 per day and the Atlantic rates at $96,500 per day, according to Spark Commodities.
Australia’s trade surplus widened more than expected in April thanks to rising exports of LNG as well as a return of tourists.
The US exported 7.29 million tonnes of LNG last month, the second highest quantity on record, though virtually all were sales to Europe and South America, according to Refinitiv Eikon data.
Separately, the Japanese government said it would not exit the Sakhalin 2 LNG project in Russia even if asked to leave.
Land for the project belongs to Russia, but the plant is owned by the Japanese government and companies, Koichi Hagiuda, the Minister for the Economy, Trade and Industry, told a parliamentary committee.
- Reuters, with additional editing by George Russell