Platts JKM, the benchmark price reflecting LNG delivered to Northeast Asia, is expected to remain stable during the week of July 21-25.

August JKM prices fell 51.8 cents week over week to $12.240/MMBtu July 18, weighed by weak incremental demand for spot cargoes among end-users across the Northeast Asian region.

Platts assessed the DES Northwest Europe Marker (NWE) for August at $11.136/MMBtu on July 18, with the JKM/NWE spread marked at $1.104/MMBtu.

Asian end-users showed slow buying interest for September deliveries as the September pricing period commenced.

A spillover in demand for H1 September delivery cargoes would be dependent on weather patterns and shifts in the coming weeks as the Northeast Asian region continues to tide through summer.

Northeast Asia

** Spot LNG prices in Asia softened in the week ended July 18, as demand from South Korea and China slowed.

** South Korea was not actively seeking September deliveries. Kogas had reportedly purchased 1-2 cargoes for August delivery before the September pricing period began.

** China remained quiet in the spot market, with current spot LNG prices uncompetitive against cheaper domestic trucked LNG and imported pipeline gas.

** Data from the platform affiliated with domestic gas distributor ENN Group showed that as of July 18, trucked LNG prices at China’s 106 LNG receiving terminals and inland natural gas liquefaction plants averaged Yuan 4,651/mt (approximately $12.34/MMBtu).

** Japan saw limited spot market activity, though JERA was reportedly seeking cargoes for August and September due to power supply concerns.

** At least one US LNG cargo has been diverted to Japan from South Korea recently for delivery at the end of July, amid low inventory concerns, according to S&P Global Commodities at Sea(opens in a new tab) data.

** The US LNG cargo loaded on the BP-operated British Listener, which left the Freeport terminal in Texas June 30, headed to JERA’s Chita terminal in central Japan, is estimated to arrive July 31 after having been previously directed to Kogas’ Incheon terminal and set to arrive July 23, according to CAS.

** Meanwhile, LNG traders noted that the East-West arbitrage for US-sourced cargoes into Asia remained largely closed. Despite the closed East-West arbitrage, traders noted no major risk to Asia’s supply-demand balance given continued weak spot demand.

** During the week of July 14-18, the Platts physical Markets on Close assessment process recorded three trades for DES JKTC for deliveries in September.

Southeast Asia

** Platts assessed the Southeast Asia Marker (SEAM) for August at $11.950/MMBtu on July 18, marking a decline of 51.3 cents/MMBtu from the previous week.

** Platts assessed the JKM/SEAM spread stable at around 29.5 cents/MMBtu on July 18.

** Demand from Thailand continued to be weak due to the monsoon season and has further declined recently as a result of the impact of tropical storm Wipha.

** Additionally, the increase in domestic gas production has further dampened buying interest, sources said. No new tenders were issued in the past week.

** Thailand’s Map Ta Phut 2 LNG receiving terminal was reportedly affected by an accidental collision involving a ship, which will likely impact the unloading schedule, market sources said.

** Vietnamese buyers were noted in the market but discouraged from making purchases due to high spot prices.

** The Philippines’ First Gen did not award the tender that closed July 9 for a cargo to be delivered July 20-26.

South Asia

** Platts assessed West India Marker (WIM) for September at $11.83/MMBtu on July 18, down 45 cents/MMBtu week over week.

** Platts assessed the JKM/WIM spread at 39 cents/MMBtu July 18, down from 42.4 cents/MMBtu in the previous week.

** India’s GAIL awarded a buy tender for August delivery on July 17 in the high $11/MMBtu, while Indian Oil Corp. bought a cargo for Aug. 11-21 delivery, via a tender that closed on July 18 at a price just below $12/MMBtu.

** Bangladesh awarded a cargo for early-August delivery at $13.24/MMBtu with the tender closing July 13. Bangladesh floated another tender for Aug. 21-22, Aug. 28-29 deliveries with the tender closing on July 20.

Derivatives

** Platts assessed the JKM Balance-month Next-day derivatives at $12.230/MMBtu July 18, reflecting a marginal positive cash differential of 1 cent/MMBtu for September delivery. The JKM September derivatives were assessed at $12.220/MMBtu.

** The US-Asia arbitrage via the Cape of Good Hope remained firmly shut, with Platts assessing the spread at minus 52.8 cents/MMBtu on July 18, widening by 14.4 cents from the previous week.

** In the Platts Market on Close assessment process ending July 18, only 4 of 39 offers listed a US loading port, further reflecting the closed arbitrage environment.
Source: Platts