15 December 2018, News Wires — Asian spot prices for liquefied natural gas (LNG) snapped a three-week losing streak to end higher this week, with the onset of winter expected to boost demand for natural gas for heating.
But gains were limited amid forecasts of warmer-than-usual temperatures for most of next week in Tokyo, Beijing and Seoul, the top demand centers for natural gas in Asia, and as more spot supply entered the market from the United States and Russia.
Spot prices for January delivery edged up about 10 cents to around $8.90 per million British thermal units (mmBtu), with cargoes trading from as low as $8.50 per mmBtu to as high as $9.10 per mmBtu, several industry sources said.
Prices for February delivery also inched higher and were estimated at around $9.10 to $9.30 per mmBtu, keeping the price curve in contango.
“The (spot) market has probably bottomed out with (prices) being pretty flat and I am hearing of more people looking for cargoes,” said a Singapore-based LNG trader.
China, the world’s No. 2 LNG importer, has ramped up both domestic gas production and imports to meet rising demand as the government switches more households to gas heating this winter.
It has switched another 3.29 million households to gas heating this winter, Reuters calculations show, more than it added last year. But analysts said the increase would not necessarily boost overall consumption in the country.
“Till now, China’s demand is increasing, but it has not affected the inventory too much,” a trader familiar with the Chinese market said.
With forecasts of a warmer-than-usual week next week, LNG buyers in China are taking a wait-and-see approach before deciding to ramp up imports of the super-chilled fuel, he said.
Taiwan’s CPC Corp entered the spot market to seek a cargo for delivery in January, while South Korea’s state-run Korea Gas Corp (KOGAS) is looking for long-term supply starting from 2025, traders said.
On the supply side, Cheniere Energy loaded the commissioning cargo of LNG from its Corpus Christi liquefaction facility in Texas, the third big LNG export terminal to enter service in the lower 48 U.S. states.
Greece this week said it would import its first U.S. LNG cargο of 150,000 cubic meters on Dec. 29 from Cheniere.
Russia’s Yamal LNG has started up train 3 at its plant, 12 months ahead of schedule, with the plant reaching full capacity of 16.5 million tonnes a year.