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GLOBAL LNG-Asian spot LNG prices rise on signs of stronger demand
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GLOBAL LNG-Asian spot LNG prices rise on signs of stronger demand
May 10, 2024 5:01 AM

LONDON, May 10 (Reuters) - Asian spot liquefied natural

gas prices rose this week on stronger demand amid high

temperatures in north and south China, pushing European buyers

to bid at relatively narrow discounts to attract sellers.

The average LNG price for June delivery into north-east Asia

rose to $10.50 per million British thermal units

(mmBtu), from $10.40/mmBtu in the previous week, industry

sources estimated.

"We have seen Asian and European prices rise higher, mostly

following news of the Gorgon LNG outage," said Ryhana Rasidi,

LNG analyst at data analytics firm Kpler.

"However, we estimate the impact of the outage to be limited

in the short term and downward pressure is expected on prices

due to the low-demand shoulder season in Europe and Northeast

Asia, where gas/LNG stocks remain sufficient for now," she said.

Chevron Australia said last week it was working to resume

full production at its Gorgon gas facility after a mechanical

fault caused one LNG production train to go offline. Analysts

expect the affected production train to be offline for up to

five weeks.

However, South Korean and Japanese buyers seemed content to

hold back from the spot market and rely on high terminal

inventories to meet an upsurge in domestic demand, said Samuel

Good, head of LNG pricing at commodity pricing agency Argus.

In the United States, Good said production has risen at

Freeport LNG export terminal, with feedgas supply levels in

recent days suggesting the equivalent of two trains at the

three-train facility were operating at near-capacity.

"Nominated supply for Thursday was greater than this,

implying that three trains were already - or close to being -

operational though not all at capacity. That said, this has been

partially offset by the start of maintenance at the country's

Cameron terminal, which is understood to be planned downtime,"

he added.

In Europe, gas storage facilities were last seen nearly 63%

full, leaving the continent in a strong position during the net

injection season.

S&P Global Commodity Insights assessed its daily North West

Europe LNG Marker (NWM) price benchmark for cargoes delivered in

June on an ex-ship (DES) basis at $9.587/mmBtu on May 9, a

$0.19/mmBtu discount to the June gas price at the Dutch TTF hub.

Argus assessed the June delivery price at $9.60/mmBtu, while

Spark Commodities assessed it at $9.548/mmBtu.

LNG freight rates lacked direction again this week with

rates in both basins drifting slightly lower - the Atlantic spot

rate estimated at $42,000/day on Friday and the Pacific spot

rate at $45,750/day, said Henry Bennett, chief operating officer

at Spark Commodities.

Argus' Good said continued low spot charter rates, and a

substantial list of open carriers on offer in the prompt market,

have cut the opportunity cost for subletting spare shipping,

with delivery to Asia instead of Europe generally offering the

potential to such firms to recoup at least some of their fleet

costs.

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