Asian spot LNG prices reach lowest level since July 2021

Due to weak demand, which is predicted to persist through the end of March, Asian spot LNG prices continued to decline this week and reached their lowest level since July 2021.

According to industry sources, the average LNG price for April deliveries to northeast Asia was $14.50 per million British thermal units (mmBtu), a decrease of $0.50 (or 2.3%) over the previous week.

Costs have decreased by more than 48% year to date and by almost 79% from the peak of $70.50/mmBtu in August 2022.

South Asian purchasers have been attracted by recent pricing. Toby Copson, global head of trading at Trident LNG, said that it seems like sub-$15 still isn’t quite enough for the Chinese.

Although while market weakness is still there, it will probably require a protracted period of lows before state-owned companies and tier 2 and 3 (players) decide to return. I don’t believe the trigger price to make domestic arbitrage profitable has yet been observed,” he continued.

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An increase in LNG prices is currently constrained, according to Leo Kabouche, LNG market analyst at research firm Energy Aspects, as a result of the absence of North Asian buyers from the spot market, high gas inventories in Europe, and the partial restart of the U.S. Freeport LNG facility after an eight-month fire-related outage.

According to Tobias Davis, head of LNG Asia at brokerage Tullett Prebon, gas prices in Europe have reached levels not seen since August 2021, and LNG cargoes are still being shipped to the continent since economics still favor Atlantic supplies over those from the Far East.

According to Ciaran Roe, global director of LNG, S&P Global Commodity Insights estimated its daily north-west Europe LNG Marker (NWM) price benchmark for cargoes delivered in March on an ex-ship (DES) basis at $12.814/mmBtu on March 2—a discount of $1.712/mmBtu to the April gas price at the Dutch gas TTF hub.

The Northwest Europe LNG price was estimated by Spark Commodities at $13.098/mmBtu, which is less than the April TTF gas rates by $1.460/mmBtu.

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