According to Reuters, Asian spot LNG prices have fallen as reluctant buyers submitted lower bids, Egypt’s call for 12 shipments in Q1 2018 has undershot expectations, and China appears to have covered LNG demand for the last quarter of 2017.
Spot prices LNG-AS for December delivery fell to US$8.70 per mmBtu, 20 cents below last week’s levels. However, at least two traders pegged December prices at around the US$8.50-8.60 per mmBtu level, arguing that buyers were unlikely to pay up.
Egypt’s tender for deliveries between January and March – including three shipments which are to be imported via Jordan – was seen as a bearish signal for global gas markets as traders had expected Egypt to seek five cargoes per month, not four.
Petroleum Minister Terek El Molla said in September the country was on track to cease importing LNG by the end of 2018, a goal seen as unrealistic by some analysts.
Egypt’s mega purchase tenders of the past several years turned the country into one of the world’s fastest-growing LNG importers, absorbing hundreds of shipments and propping up global prices for the fuel.
Weaker spot Asian prices come after weeks of gains which saw the contract rally more than 40% since the end of August.
Given rapidly growing imports by Chinese companies this year, traders believe that the country’s current stocks are now sufficient to cover demand throughout November and December so long as temperatures stay within normal bounds. However, Chinese and other buyers are expected to seek more supply for delivery from January onwards. Weather will be a driving factor for demand and traders are waiting for a clearer sense of temperature forecasts for the period.
Read the article online at: https://www.lngindustry.com/liquid-natural-gas/23102017/asian-prices-drop-on-wary-buyers-lacklustre-egyptian-demand-and-an-update-on-china/