According to Reuters latest report, in July, Japanese LNG spot prices fell to a new three year low.
The price for LNG shipments to Japan in July reportedly averaged US$4.70 per million Btu, down from US$5.50/million Btu in June. The lowest price recorded before July was US$4.10/million Btu in May 2016.
This drop in LNG spot prices is reportedly helping Japanese utilities cut their costs, however the companies’ overall import prices are still much higher at US$9.14/million Btu. This is due to the fact that Japanese utilities still do the majority of their LNG trading via long-term contracts linked to oil prices.
Japanese utilities have long favoured the stability of long-term contracts over the spot market. However, these lower price levels are already marking a significant shift in strategy and approach, as evidenced by the more aggressive line the utilities are reportedly now taking in negotiating price reviews.
Read the article online at: https://www.lngindustry.com/liquid-natural-gas/09082019/japanese-lng-spot-prices-fall/