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GLOBAL LNG-Asian spot LNG little changed on ample stocks, mild weather
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GLOBAL LNG-Asian spot LNG little changed on ample stocks, mild weather
Jan 24, 2025 5:10 AM

KUALA LUMPUR, Jan 24 (Reuters) - Asian spot liquefied

natural gas (LNG) prices were little changed this week, as ample

inventories and mild weather capped demand from East Asian

buyers.

The average LNG price for March delivery into north-east

Asia rose slightly to $14.00 per million British

thermal units (mmBtu), industry sources estimated.

"Demand in Asia remains tepid, with East Asia demand

relatively constrained amidst warmer-than-usual weather," said

Pang Lu Ming, Rystad Energy senior analyst, adding that local

forecasts indicated that South Korea and Japan would see

above-normal temperatures through to early and mid-February.

While southern China will also experience warmer-than-normal

temperatures in coming days, colder temperatures will be seen in

parts of the north, said Pang.

East Asian inventories remain ample.

"Activity from Japanese players remains subdued, implying

sufficient winter inventories for existing forecasts," Pang

added, saying South Korean and Chinese players also continued to

report sufficient inventories for winter.

In Europe, S&P Global Commodity Insights assessed its daily

North West Europe LNG Marker (NWM) price benchmark for cargoes

delivered in March on an ex-ship (DES) basis at $14.589/mmBtu on

Jan. 23, a $0.37/mmBtu discount to the March gas price at the

Dutch TTF hub.

Argus assessed the price at $14.61/mmBtu, while Spark

Commodities assessed the February price at $14.594/mmBtu.

Natasha Fielding, head of European gas, LNG and biomass

pricing at Argus, noted European delivered LNG prices had

increased their premium over northeast Asian markets, pointing

to storm disruption to U.S. loadings and higher summer

restocking demands following a German proposal to subsidise

summer injections.

Freeport LNG also closed its export plant in Texas on

Tuesday due to a power feed problem during a winter storm.

The European premium has further incentivised firms to ship

uncommitted LNG cargoes in the Atlantic basin to Europe instead

of Asia, and could start to pull Middle Eastern supply away from

Asia too, Fielding added.

LNG freight rates fell to record lows, with Atlantic rates

dropping for a third straight week to $9,000/day on Friday

driven by an influx of newly built vessels and the directing of

U.S. spot cargoes to Europe, said Spark Commodities analyst

Qasim Afghan.

Pacific rates fell to $15,500/day.

The U.S. arbitrage to northeast Asia via the Cape of Good

Hope for February widened, again indicating that U.S. cargoes

have an incentive to deliver to Europe, Afghan added. He also

noted that the Qatar front month arbitrage to Northeast Asia had

closed out for the first time in almost two years, also

incentivising deliveries to Europe over Asia.

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