Reuters is reporting that the latest decline in spot market prices is prompting LNG traders in Japan to be more aggressive in price reviews built into traditional long-term contracts linked to oil prices.
The traders are reportedly also looking to purchase more LNG cargoes via the Asian LNG spot market, in order to take advantage of the current three-year low prices. These prices are approximately half the average contract price for traders in Japan.
Japanese LNG traders have traditionally favoured the stability of long contracts over the spot market, however a shift has now been made a necessity as the need to cut costs grows. These same traders will also need to adapt to counteract the growing trend of customers showing preference for new players entering the market.
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