JKM LNG futures Q3 volume rises on quarter; Sep Balmo-ND trades hit record high

JKM LNG futures traded volumes cleared on financial exchanges in the third quarter reached 164,748 lots, up from Q2's 152,187 lots and Q1's 136,701 lots, according to exchange and broker data.

Previously, traded volumes for the same quarter were last higher in Q3 2021 when they reached 284,260 lots.

The JKM derivative contracts traded on the Intercontinental Exchange and the Chicago Mercantile Exchange in September totaled 42,284 lots, equivalent to approximately 8.1 million mt, or 128 cargoes. This reflected a drop of 34.87% month on month and 13.22% year on year.

The monthly contracts for October to December 2023 saw the highest traded volumes on ICE at 23,740 lots, making up 56.14% of total trade volumes in September.

JKM derivatives cleared on ICE at the end of the month were 42,284 lots over September. In contrast, no lot was cleared on the CME.

Meanwhile, a total of 78,470 lots of open interest was standing across ICE and CME as of Sept. 29, with ICE reporting 78,410 lots and CME reporting 60 lots.

Notably, ICE recorded the first-ever JKM Exchange of Futures for Physical (EFP) derivative on Oct. 2 with a total of 8,100 lots.

ICE also recorded the highest single-day record for LNG traded futures at 11,099 lots on Oct. 2.

Separately, the number of trades of the JKM Balance Month-Next Day (Balmo-ND) derivatives reported in the Platts APAC LNG derivatives Market on Close assessment also hit a record high in September with a total of 48 trades.

A Singapore-based trader said as the Balmo-ND price represented the current market outlook more fully than the full-month average price in the middle of pricing, using the JKM Balmo-ND derivatives to trade is preferred in times of greater price movements due to a shift in fundamentals.

Platts JKM, the benchmark price reflecting LNG delivered to Northeast Asia, rose month on month in September, with the average JKM price in September at $13.87/MMBtu, up from $12.62/MMBtu in August.

The change in Asian LNG prices in September was caused by various incidents that fueled supply uncertainties like the protected industrial action at Chevron's facilities in Western Australia and unplanned outages at Norwegian gas fields.

Asian LNG prices were also supported by recent emerging buying interest for spot cargoes from a few companies such as Kansai and Unipec, as they aimed to replenish stocks ahead of the peak winter season.

While thin trading activity was observed in September, trading activity could pick up in October, as utilities across Northeast Asia were reported to be monitoring prices and awaiting opportunities to procure cargoes for the winter season, according to market participants.