23-07-2016

Sep Platts JKM LNG cargoes end week up to $6/MMBtu; bids rise on low supply

LNG

Platts JKM for LNG for September delivery ended the trading week at $6/MMBtu Friday, up 35 cents/MMBtu since rolling to become the new front month on Monday, as recent tender results, firmer end-user demand and expectations of even greater future demand pushed prices higher.

Supply was also limited with few spot cargoes offered. And while there was reportedly more interest in the European market for reload cargoes, following a widening spread between spot prices and European hub prices, not many were available.

In North Asia, South Korea’s Komipo issued a tender Friday for a 2.2-2.33 million MMBtu cargo to be delivered to its terminal between August 26-28 on a DES basis. The tender closes July 27.

In the Pacific, Indonesia’s Donggi Senoro had closed a tender Tuesday offering a single cargo for delivery to Japan or South Korea over August 30-September 10. Initial reports were that a Japanese buyer had been awarded the tender, but this could not be confirmed.

Higher demand from the Middle East and India resulted in the DES West India assessment gaining 40 cents/MMBtu over the week to settle at $6.05/MMBtu Friday, a premium of 5 cents to the North Asian market.

However, though demand from Indian users was heard to be strong, recent buy tenders from Petronet, Gail and GSPC were not promising, with buyers choosing to delay or not award their tenders due to the high offers received.

In the Atlantic, Argentinian Enarsa’s tender seeking eight prompt cargoes was heard partially awarded. All four of the Bahia Blanca cargoes were awarded, while only two of the four cargoes into Escobar were awarded.

Gunvor and Trafigura were each awarded one cargo each into Bahia Blanca, while Vitol was awarded two cargoes into the terminal.

Spanish utility player Ibedrola and trader Vitol secured one cargo each for delivery into the Escobar terminal.

All cargoes had been awarded above the $6/MMBtu level, with the Escobar cargoes expected to have sold at a premium to the Bahia Blanca slots.

These price levels were similar to recent deals heard in Asia. with unconfirmed reports of spot deals having been recently concluded at or above $6/MMBtu in the Far East.

Source: Platts 

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