The average LNG price for December delivery into northeast Asia was estimated at $6.30 per million British thermal units (mmBtu), $0.50/mmbtu down from last week.
Buyers from Japan, South Korea and Pakistan came to the market looking for winter cargoes, but market sources said it was not enough to reduce a significant global oversupply, adding that the market was overpriced in recent weeks.
The number of vessels floating with cargoes onboard soared to 28 from 19 in the past week, according to data provider Kpler.
The majority of those cargoes were loaded close to a month ago or more, with some loaded back in August, meaning that sellers may be under pressure to unload them as soon as possible.
“Generally you cannot store LNG on a vessel for more than two months due to its aging and boil-off,” one LNG trader said, referring to natural evaporation.
“Those who have been floating LNG for 1.5 months are likely offering cargoes with a significant discount, which puts pressure on the market.”
At least five tankers from the floating storage were loaded close to 1.5 months ago or more.
The drop in Asian prices has resulted in a tighter spread between Europe and Asia, with the arbitrage for cargoes from the United States to Asia closing this week.
The trade from the Atlantic basin to the Pacific has also been impacted by high shipping rates.
Rates were estimated at around $130,000-140,000 per day this week. Two shipping sources said that there was also a deal at $150,000/day in the Atlantic basin this week.
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