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Global LNG: Prices at six-month lows as floating cargoes released

Reuters  |  LONDON 

By and Zawadzki

LONDON (Reuters) - Asian spot prices for liquefied (LNG) slumped this week to a six-month low, bucking the usual winter trend, as low demand persisted and supplies were boosted by deliveries from tankers that had been floating in north Asian waters for weeks.

Spot prices for January delivery dropped a dollar to $8.80 per million British thermal units (mmBtu), the lowest since May and below the levels of a year ago, for the first time in 2018.

Prices for February delivery, although also weaker, dropped less and returned to contango with the January. Prices were estimated at around $9.00 to $9.30 per mmBtu for February.

Low demand during the northern hemisphere winter and falling prices follow frantic buying by Asian utilities in September and October, filling up storage for the coming months.

Nevertheless, some traders bet on continued high demand and began using laden LNG carriers as storage in waters off Singapore, and South China, while others had cargoes waiting there for delivery slots to become free.

When the market turned to backwardation last week, some of these traders sold the cargoes if only to gain from sky-high shipping rates by subleasing the newly freed-up tankers.

Despite the low demand, several cargoes were sold in both Pacific and Atlantic basins, according to trade sources.

has sold a late December cargo from on a delivered ex-ship (DES) basis, a said. Pacific LNG (APLNG) sold a DES cargo for January below $9 per mmBtu, a shipping source said.

was marketing an early January cargo from this week, with one saying on Thursday the cargo was gone.

(Kufpec) is closing on Friday a tender for a free on board (FOB) cargo loading on Jan. 18-23 from

Japan's utility was one of the this week, securing a late January cargo, a trader said.

SELLS TO

Russia's will sell the rest of its winter cargoes to Europe, having covered three positions in -- a way of cutting down on shipping costs from to Asia, a source with knowledge of the matter said.

bought cargoes for December at a $1.60 premium to the Dutch gas hub benchmark price, a January cargo at a slight discount to the spot Asian LNG price and February cargo linked to Brent crude, the source said.

is trying to sell two summer cargoes to Asia, with prices expected to be linked to oil, according to the source.

In the Atlantic, sold an FOB cargo for December loading from its Bonny plant, after offering at least two at the end of November, several sources said.

In the Middle East, won an FOB tender from Abu Dhabi's state-owned for loading between Dec. 26 and 28.

(Reporting by and Zawadzki; editing by David Evans)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, December 07 2018. 21:32 IST
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