Pacific LNG: Key market indicators for Sep 1-5

Platts JKM, the benchmark price for LNG delivered to Northeast Asia, is expected to be rangebound in the week of Sep. 1-5.

Platts, part of S&P Global Energy, assessed the October JKM prices at $11.012/MMBtu Aug. 29, marking a 66.6-cent/MMBtu drop week over week, weighed by persistent weak buying interest for spot cargoes among Northeast Asian end-users.

Winter restocking was deemed too early to kickstart, market sources said, with demand for winter deliveries expected to pick up in October. Current inventory levels across the region are sufficient to meet current downstream demand, dampening spot buying interest.

The DES Northwest Europe Marker for August was assessed at $10.282/MMBtu on Aug. 29, with the JKM/NWE spread marked at 73 cents/MMBtu, widening slightly by 6 cents/MMBtu week over week.

The market was also closely watching the movement of the Arctic Mulan, a sanctioned Russian LNG carrier, that departed from a Tieshan terminal in the Port of Beihai in southern China on Aug. 29.

Northeast Asia

• The Platts JKM experienced a sharp fall in the week to Aug. 29, from a peak of $11.713/MMBtu on Aug. 25 to a low of $11.001/MMBtu on Aug. 28.
• Price-sensitive buyers stayed on the sidelines, holding off on winter restocking amid ample supply.
• Japan continues to face unprecedented heatwaves. Japan's Meteorological Agency said on Aug. 28 that the country is expected to experience temperatures that will be higher than the 30-year average over Aug. 30-Sept. 29 across the country.
• Statistics released on Aug. 28 showed Japan's average price of imported LNG was $11.23/MMBtu in July, the lowest since September 2021 when it came in at $10.78/MMBtu, according to the Ministry of Finance.
• In an auction by CNOOC Gas and Power Group on the Shanghai Petroleum and Natural Gas Exchange Aug. 25, a cargo for October delivery was sold to Guanghui Energy at Yuan 4,100/mt, equivalent to approximately $11/MMBtu, sources said. The remaining cargoes for October deliveries were unsold, with sources indicating limited interest due to an oversupplied domestic market.
• Data from the platform affiliated to domestic gas distributor ENN Group showed that as of Aug. 29, trucked LNG prices at China's 106 LNG receiving terminals and inland natural gas liquefaction plants averaged Yuan 4,266/mt, falling from Yuan 4,373/mt on Aug. 22.
• During the week of Aug. 25-29, the Platts physical Markets on Close assessment process recorded three trades for DES JKTC for deliveries in October.

Southeast Asia

• Platts assessed the Southeast Asia Marker for October at $10.813/MMBtu on Aug. 29, reflecting an increase of 70 cents/MMBtu from the previous week.
• The JKM/SEAM spread was widened to 19.9 cents/MMBtu on Aug. 29, from 16.5 cents/MMBtu on Aug. 22.
• Thailand remained quiet in the spot market with healthy inventories as the country experienced rainfalls, which made temperatures mild for summer.
• Thailand imported 728,347 mt of LNG in July, down 39.6% year over year and 31.5% month over month, data from the customs department showed Aug. 25.
• Indonesia's Tangguh LNG Train 3 is currently shut for 14-16 days for maintenance carried out by operator BP. The works will be completed within a week, SKK Migas said Aug. 26. No impact is expected on exports, according to a source familiar with the matter.
• Vietnam's PetroVietnam Gas issued its first five-year term supply tender seeking 400,000 mt of LNG on a DES basis to Thi Vai LNG terminal, from 2027 to 2031. The tender closes Sept. 24.

South Asia

• Platts assessed West India Marker for October at $10.713/MMBtu on Aug. 29, down 67.5cents/MMBtu week over week.
• The JKM/WIM spread was recorded at 29.9 cents/MMBtu Aug. 29, up from 29 cents/MMBtu in the previous week.
• South Asian buyers issued buy tenders following the price dip despite weak downstream demand due to competitive alternative fuel prices.
• India's GAIL sought a cargo for delivery over Oct. 11-30 to Dabhol. The tender was closed on Aug. 28, but it went unawarded due to higher-than-expected prices.
• BPCL was in the market seeking three cargoes for delivery over October-November 2025 and three cargoes for 2026 and 2027, in a tender closing Sept. 1.
• During the week of Aug. 25-29, the Platts physical Markets on Close assessment process recorded five bids for delivery to West India over the first half of September by Gunvor and Vitol.

Derivatives

• The JKM balance-month next-day and November derivatives were valued at $10.990/MMBtu and $11.04/MMBtu Aug. 29, down 69 cents/MMBtu and 73 cents/MMBtu week over week.
• Over the week, the spread between the BalMo-ND and November contracts narrowed from 10 cents/MMBtu on Aug. 25 to 5 cents/MMBtu on Aug. 29. The narrowing inter-month BalMo-ND/November spread had disincentivized opportunities for contango play or optimizations, market sources said.
• The JKM BalMo-ND Cash differential for October on Aug. 29 was assessed at small premiums at 2 cents/MMBtu and 2.3 cents/MMBtu for H1 and H2 October, respectively.
• The East-West arbitrage via the Cape of Good Hope remained largely shut, with the spread assessed at minus 47.9 cents/MMBtu on Aug. 29.