GLOBAL LNG-Asian spot LNG prices fall as peak winter demand fades

Asian spot LNG prices fell as traders started to book cargoes for a warmer season, after a period of peak heating demand which sent prices rocketing.

The average LNG price for March delivery into Northeast Asia LNG-AS was estimated at around $8.90 per million British thermal units (mmBtu), at the lower range of the $8.00-$14.00/mmBtu estimated the previous week, traders said.

March prices are more than three times lower than those for February.

Individual companies paid nearly $40.00/mmBtu during the peak demand, according to consultancy firms Energy Aspects and Timera Energy. Now, the latter sees April prices retreating to less than $7.00/mmBtu by April.

The market experienced supply disruptions in Asia and an acute shortage of cargoes in the region, which made spot charter rates surge six-fold to $350,000 per day within months, Timera Energy said.

“Market participants have always priced in a steep backwardation into the March period, due to expected warmer spring temperatures and lower subsequent demand,” Des Wong, head of EMEA LNG pricing for Platts, said in a note.

Temperatures in Tokyo and Shanghai, in two of the world’s top LNG consuming countries, are expected to rise slightly above the historical average over the next two weeks, weather data from Refinitiv Eikon showed.

Congestion delaying LNG shipments via the Panama Canal which have been driving up costs is also expected to ease after March, traders added.

Buyers from the United States are expected to cancel up to five LNG cargoes for loading in March, half the volumes that were canceled in February amid a shortage of ships, trade sources said on Thursday. (Reporting by Sabrina Valle; editing by Nina Chestney)

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