Asian LNG market sees record-high MOC activity, longer cargo chains amid rising liquidity

The Asian LNG spot market saw record-high trading activity during the Platts Market on Close assessment process -- with longer cargo trading chains also seen -- driven by cargo standardization, Platts JKM balance-month next-day hedging and divergent winter-demand expectations, according to market sources.

The market recorded 46 bids and offers through the MOC on Aug. 26, setting a new record and surpassing the previous high of 43 on Aug. 21, with market sources saying the surge reflected rising liquidity and growing commoditization of LNG trading.

Standardization, downstream trading

Many market participants pointed to the standardization of LNG cargoes -- with more uniform sizes, quality and contract terms -- as a key driver of the increased activity, as it has greatly improved traders' ability to optimize positions and manage risks.

Traders opted to bring their positions into the JKM pricing period, based on their strategies for physical and derivatives trading, amid improving liquidity in the MOC, they said.

"Activity is so liquid that traders don't mind rolling their cargoes into pricing," a trader said.

Meanwhile, the ability to hedge via JKM BalMo-ND exposures has further encouraged market participants to bring more cargoes into the pricing process, as reflected by the surge in JKM BalMo-ND-linked cargo trades since late 2024.

Some market sources also cited recent divergent views on winter demand as a factor driving November trading activity.

"The volatile October-November spread suggests that many hold differing views on November prices, as winter demand projections remain unclear; activity is expected to stay high until the picture becomes clearer," a second trader said.

Cargo chain length

With rising liquidity, market sources also noted the emergence of longer cargo trading chains -- where multiple counterparties are involved -- before the cargo is ultimately imported and consumed.

In one case, a single mid-August-delivery cargo was heard to have traded 46 times in the spot market -- a record that highlighted the depth of reselling activity among market participants, a third trade source said.

Another cargo chain involving 44 counterparties was also heard in July, the source added.

"Long cargo chains are inevitable when a cargo is sold well in advance and subsequently traded multiple times," a fourth trader said.

Multiple counterparties often appear within the same chain, sometimes forming closed loops during circle-outs.

For example, the 46-trade cargo involved some companies appearing four to five times, with a couple of MOC trades embedded in the same chain, a Northeast Asian end-user said.

"The long cargo chain is the result of increased standardization in the market and greater liquidity during the MOC," another trader said.

Several market sources attributed the longer cargo chains to efforts by trading houses and certain Northeast Asian end-users to meet trading volume targets, amid a year of weak downstream demand and limited supply additions in 2025.

During periods of softening downstream demand, some end-users even chose to trade out of their long-term contract holdings, seizing spot market opportunities to optimize their portfolios, they said.

Market participants said this behavior not only increases trading volumes but also lengthens the cargo chain, as the cargo passes through more hands before final delivery.

They added, however, that it was difficult to pinpoint a single cause, as the interplay of standardization, end-user strategies and optimization needs has driven active trading, with the record-setting cargo chain marking a potential milestone as the market matures.