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Asian spot LNG prices reach new high

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LNG Industry,

According to Reuters, Asian spot prices for LNG have edged to their highest level since January. The market has gradually tightened ahead of the peak-demand winter heating season and as consumption in China soars amid its huge gasification programme.

Prices rose 10 cents to US$8.50 per million British thermal units (mmBtu), their highest since January this year.

Climbing Chinese demand, a result of its huge programme to move millions of households away from coal to gas heating as well as a push for LNG as a transport fuel, has helped drive prices 55% higher from their 2017 lows.

Average January to August 2017 Chinese LNG imports were 2.8 million t, up from 1.9 million t during that period of last year.

Prices have also been supported by strong imports from top buyers Japan and South Korea, who have been stockpiling in preparation for the peak-demand winter heating season.

Despite the strong overall demand and resulting tighter conditions, many traders expect the spot LNG market to be capped. This is reflected in the forward curve which sees prices fall back below US$6 per mmBtu by mid-2018.

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