Tuesday, June 6, 2023
HomeGasAsian and European LNG buyers bid up prices, but flows stay steady


To our FREE newsletter
Get all the latest maritime news delivered straight to your inbox.

Asian and European LNG buyers bid up prices, but flows stay steady

The spot price of liquefied natural gas (LNG) in Asia is trading at record highs for this time of year amid reports that traders across the globe are competing to secure scarce cargoes.

An analysis of global flows of the super-chilled fuel, however, shows that while traders may be bidding up prices, there is little change in where the LNG is being shipped.

Flows to Asia have been just about steady by volume since March, after the winter demand peak, and the same is true for Europe.

In other words, there is scant evidence buyers in either of the major demand regions have been able to increase their share of cargoes at the expense of purchasers in the other.

This suggests that while prices have surged, it isn’t the case that excess demand in one region is drawing more cargoes, rather Asia and Europe are getting roughly the same share of the super-chilled fuel now as they have in recent months.

Asia imported 23.08 million tonnes of LNG in August, according to commodity consultants Kpler, slightly down from July’s 23.94 million, which was the highest since February.

Since March, Asia’s LNG imports have been between 21.2 million tonnes and the nearly 24 million tonnes in July, a range of just 2.8 million tonnes.

For Europe, LNG imports were 4.98 million tonnes in August, slightly higher than July’s 4.69 million, according to Kpler.

Europe’s imports have been steady at 5 million to 6 million tonnes for the past three months, although they were higher over the winter, which is the usual season pattern.

Kpler expects the recent pattern to continue this month, with Asia’s September imports forecast at 22.99 million tonnes and Europe’s at 4.95 million.


Looking at the percentage share for each region shows Asia is likely to import 76.5% of global LNG supply in September, while Europe will take 16.5%.

For August, the figure was 76.3% for Asia and 16.4% for Europe. In July, it was Asia 77.2% and Europe 15.1%.

Europe does tend to take a larger share in the shoulder season between Asia’s winter and summer demand peaks, reaching a 2021 high of 27.6% in March, while Asia took 67.9% that month.

Overall, the flows don’t suggest that buyers in any one region are able to outcompete those in the other.

The recent moves in pricing may suggest, though, that buyers in Europe and Asia are having to increase spot offers to secure their share of available cargoes.

The price of New York-traded contracts based on Asia’s benchmark Japan Korea Marker JKMc1 ended at $18.82 per million British thermal units (mmBtu) on Monday.

They have gained 224% since the low so far in 2021 of $5.805 per mmBtu reached on Feb. 25.

The price of TTF natural gas contracts in Europe TRNLTTFMc1, converted into mmBtu, ended at $21.456 per mmBtu on Monday, up 290% since their closing low this year of $5.508 on March 3.

The TTF price usually trades at a narrow discount to the JKM contract, but it has traded at a premium to the Asia marker since Sept. 8.

This suggests European buyers may be more willing to pay higher prices to secure natural gas for the upcoming winter amid fears of a shortage across the continent.

Asian LNG buyers are also worried about winter shortages, but some major importers, namely India and Pakistan, are pulling back on buying spot cargoes due to the current high cost.

Some Asian LNG importers have other options to generate power. Japan and China, the world’s two biggest buyers of LNG, can boost power generation from other fuels, most notably coal.

This suggests European buyers may be prepared to pay more and draw spot cargoes from Asia in coming months.

Source: Reuters

Related Posts


Finance & Economy
Shipping News

Globus Q1 results hit by weak dry bulk market

Globus Maritime Limited, a dry bulk shipping company, reported its unaudited consolidated operating and financial results for the quarter ended March 31, 2023. Revenue $8.6 million...

BW LPG appoints new CFO

BW LPG announced that it has appointed Ms Samantha Xu as Chief Financial Officer (CFO), effective 1 September 2023. Ms Xu has over 20 years...

Frontline Posts Highest First Quarter Results Since 2008

Frontline plc reported unaudited results for the three months ended March 31, 2023: Highlights Highest first quarter profit since 2008 of $199.6 million, or $0.90 per...

Diana Shipping posts slightly lower Q1 profit; takes out $123m in loans

Diana Shipping reported net income of $22.7 million and net income attributed to common stockholders of $21.3 million for the first quarter of 2023....

CMA CGM Profit Eases as Container Transport Demand Wanes

CMA CGM expects its profit to ease further for the rest of the year after a first-quarter decline, as an uncertain economy and influx...

Taiwan Shipping Firms Set to Hand Out Bumper Bonuses Again

Taiwanese shipping companies are handing out bumper mid-year bonuses despite a slump in global...

Baltic index hits over 3-month low amid lower coal imports

The Baltic exchange’s main sea freight index extended losses for the 15th session straight...

Baltic index falls for the month as vessel demand wanes

The Baltic exchange’s main sea freight index recorded its first monthly decline in four...

North Korea missile tests endanger shipping, UN maritime agency told

North Korean missile tests are endangering the safety of commercial shipping in busy sea...

Singapore Clamps Down on Tankers as Dark Fleet Grows

Singapore’s detentions of oil and chemicals tankers have surged since early last year, highlighting...

US West Coast port workers shut terminals in showdown over pay

The employers of more than 22,000 dock workers at U.S. West Coast seaports on Friday said the union representing those laborers “is staging concerted...

DP World Completes Terminal Expansion Project Vancouver Port

DP World has completed the AED954 million ($259.78 million) Centerm expansion project, increasing container throughput at the Port of Vancouver by 60 percent. The terminal...

DP World completes AED 954 million Vancouver port expansion

DP World and the Vancouver Fraser Port Authority have celebrated two historic events – the completion of the Centerm Expansion Project at DP World...

Alexandroupolis port gets 24 million euros of EU funding

Greece has secured 24 million euros ($26 million) in European Union funding to upgrade its northern Aegean Sea port of Alexandroupolis, privatisation agency HRADF...

Port Hedland Iron Ore Exports Down 5% in April

Pilbara Ports Authority (PPA) has delivered a total monthly throughput of 57.7 million tonnes (Mt) for April 2023. This throughput was a two per cent...