LNG stocks held by Japan's major power utilities rose to the highest level on record as of Aug. 28 as domestic utilities faced weaker-than-anticipated power demand amid cooler temperatures.
The LNG inventory advanced for the seventh straight week, rising 6.9% on the week to 2.63 million mt as of Aug. 28, the Ministry of Economy, Trade and Industry said Aug. 31.
It was the biggest week-on-week percentage rise since July 24, when LNG stocks jumped 15.4% on the week to 2.25 million mt.
METI does not have comparable Aug. 28 data for the previous year. However, at end-August 2021, inventory stood at 2.43 million mt, while the average over fiscal year 2017-18 (April-March) to FY 2021-22 for end-August was at 1.85 million mt.
Highest on record
The Aug. 28 LNG stocks were the highest on record since METI started releasing weekly inventory in January 2021, said a METI source, adding that the end of August stocks will be the highest since the ministry started tracking the end-month stock data in fiscal year 2017-18 (April-March).
The Japanese power utilities' LNG stocks got a boost from easing power demand in the light of cooler temperatures in the Tokyo and Chubu areas, the METI source said.
The LNG inventory built comes at a time when JERA is seeking to sell a prompt delivery LNG cargo bilaterally in the week of Aug. 29 in the face of high inventory, several market sources told S&P Global Commodity Insights.
Spot prices
The Platts JKM for the first-half of October was assessed at $55.462/MMBtu, while the second-half of October was assessed at $56.279/MMBtu on Aug. 30, S&P Global data showed.
Platts had assessed H1 October at $58.89/MMBtu, while H2 October was assessed at $59.199/MMBtu on Aug. 23, as per S&P Global data.
Spot LNG prices have eased due to limited buying interest for September and October delivery, a