Sunday, January 29, 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

Oaktree looking at block sale of existing shares in Hafnia Limited

OCM Luxembourg Chemical Tankers S.à r.l. which is ultimately controlled by funds managed by Oaktree Capital Management L.P. (the "Seller") has retained Fearnley Securities,...

John Fredriksen Increases Stake in Euronav

Norwegian billionaire John Fredriksen has once again increased his stake in Belgian tanker company Euronav in wake of Frontline’s termination of its combination agreement...

First Citizens Bank Arranges $44.2 Million of Debt Financing for Navios Partners

First Citizens Bank announced that its Maritime Finance group, part of the CIT division, served as sole lead arranger on $44.2 million in debt...

Eagle Bulk Appoints Kate Blankenship to Board of Directors

Eagle Bulk Shipping Inc., one of the world’s largest owner-operators within the midsize drybulk vessel segment, announced that it has appointed A. Kate Blankenship...

Golar LNG: Unwind of majority of TTF hedges of 2023 and 2024 Dutch Title Transfer Facility exposure

Golar LNG Limited (“Golar”) announced that it has unwound the majority of its swap arrangements for its Dutch Title Transfer Facility (“TTF”) linked production...

Baltic index hits fresh multi-year lows on capesize dip

The Baltic Exchange’s main sea freight index, tracking rates for ships carrying dry bulk...

Baltic index falls for seventh session on lower capesize demand

The Baltic Exchange’s main sea freight index, tracking rates for ships carrying dry bulk...

Baltic index hits fresh 2-1/2-year low as larger vessel rates slip

The Baltic Exchange’s main sea freight index extended losses to a sixth straight session...

Baltic index down for fifth day on lower vessel rates

The Baltic Exchange’s main sea freight index fell for the fifth straight session on...

Maritime UK: Net Zero Review published

On 13 January, the Department for Business, Energy and Industrial Strategy (BEIS) published the...

Port of Long Beach Closes 2022 with Second-Busiest Year

The Port of Long Beach marked its second-busiest year on record by moving 9.13 million twenty-foot equivalent units in 2022, allowing for a return...

Hapag-Lloyd AG acquires share in J M Baxi Ports & Logistics Limited

Hapag-Lloyd AG signed a binding agreement today under which it will acquire 35% of J M Baxi Ports & Logistics Limited (JMBPL) from a...

Nigeria opens ‘game changer’ billion-dollar deep seaport

Nigeria opened a billion-dollar Chinese-built deep seaport in Lagos on Monday, which is expected to ease congestion at the country’s ports and help it...

SC Ports handles nearly 3 million TEUs in record 2022

South Carolina Ports had a record 2022 with the most containers ever handled at the Port of Charleston. SC Ports moved nearly 2.8 million TEUs...

January oil loadings from Russia’s Baltic ports set to jump 50% vs Dec

Urals and KEBCO crude oil loadings from Russia’s Baltic ports of Primorsk and Ust-Luga in January are set to rise by 50% from December...