Global: LNG-Asian spot prices rise on summer demand for air-conditioning units

Shizuoka Gas

28/05/2021 09:32

By Sabrina Valle
    RIO DE JANEIRO, May 28 (Reuters) - Asian spot prices for
liquefied natural gas (LNG) rose this week, as buyers stocked up
the power-generating fuel on anticipation that a
warmer-than-usual summer will spur demand for air-conditioning
units.
    The average LNG price for July delivery into Northeast Asia
 LNG-AS  was estimated at about $10.30 per million British
thermal units (mmBtu), up 70 cents from the previous week,
industry sources said.  urn:newsml:reuters.com:*:nL2N2N818C
    Temperatures in Beijing, Tokyo, Seoul, and Shanghai are
expected to be higher than average over the next two weeks,
weather data from Refinitiv Eikon showed, which could increase
gas demand for cooling.
    Spot LNG prices seasonably peak in the northern hemisphere
winter and summer periods of high demand for heating and
air-conditioning, respectively, and should remain under pressure
throughout the year on high demand, consultancy Wood Mackenzie
said.  
    "Winter will see market dynamics getting increasingly
tighter," Robert Sims, head of LNG Short-Term, Gas and LNG
Research at Wood Mackenzie, said in a note.
    Supply coming from the United States, which hit historical
levels last month, decreased this week with export plants
entering seasonal maintenance, adding to a strained market. 
 urn:newsml:reuters.com:*:nL2N2NE1QW
    Trafigura sold a cargo to Vitol for delivery between July 17
and July 21 in Tianjin, China, with a premium of $1.45 per mmBtu
over European LNG prices, according to traders. Premiums over $1
per mmBtu tend to compensate for the longer trip costs to Asia,
attracting ships to head East.
    Buyers, nevertheless, were resistant to pay for cargoes
offered well above the $10 per mmBtu range, a trader said. 
    Petronas sold two cargoes for delivery between July 7 and 8,
and July 23-24 to North Asia for slightly more than $10 per
mmBtu, a trader said.
    Guangzhou Gas Group purchased a cargo for June 27 delivery
to Dapeng terminal at around mid-$10 per mmBtu, industry sources
said.
    Japan's Shizuoka Gas bought a cargo for second-half
September loading from Papua New Guinea LNG plant at around
$10.30 per mmBtu, an industry source said. 

 (Reporting by Sabrina Valle, additional reporting by Jessica
Jaganathan, Editing by Sherry Jacob-Phillips)
 ((Sabrina.Valle@thomsonreuters.com;))