Asia LNG physical MOC activity in Nov hits record 251 bids, offers, trades

Trading activity in the Asia LNG physical and derivatives Platts Market on Close assessment process reached record highs in November, according to data from Platts, part of S&P Global Commodity Insights.

The physical Platts Market on Close assessment process in November saw a total of 251 bids, offers and trades, surpassing the previous monthly high of 240 recorded in September 2021.

A total of 17 trades of physical cargoes were reported during the physical MOC in November, equivalent to around 1.1 million mt of LNG physical cargoes traded in November 2023. This compares with October's 975,000 mt traded.

Nov. 29 and Nov. 30 also recorded the highest number of trades reported in a day at four -- an amount not seen since Sept. 23, 2019.

Some 110 bids, offers and trades for physical cargoes were linked to the Platts JKM index, while 70 bids, offers, and trades were linked to the TTF natural gas price index. The remaining 71 bids, offers and trades were reported on a fixed-price basis.

November also marked the first time in which multiple entities were active in the Asia LNG physical MOC assessment process. A total of 18 entities reported bids, offers, or trades namely, Aramco, DGI, Glencore, Gunvor, Jera, Marubeni, Mercuria, PetroChina, RWE, SEFE, Shell, Total Energies, Trafigura, Unipec, Uniper, Vitol, BP and Petronas.

Notably, SEFE and Petronas marked their first trades on the Asia LNG physical MOC assessment process on Nov. 1 and Nov. 30 respectively.

As of Nov. 30, the number of physical transactions in the Asia LNG MOC assessment reported in Q4 2023 reached an all-time high with 14 entities reporting 32 trades.

The derivatives MOC process in November also saw significant activity, recording the highest-ever number of bids, offers and trades reported at 1,744. The previous high was recorded in October 2023 at 880.

A total of 365 trades of 250,000 MMBtu each were reported by 13 entities, surpassing the previous high in October at 177 trades. The highest number of trades reported in a day was recorded on Nov. 23 at 47 trades.

The derivatives MOC assessment process in November also recorded the first-ever bids and offers for the JKM-WIM spread derivatives.

Vitol and BP reported five bids and three offers for the JKM-WIM spread derivatives for the January 2024, Q2 2024 and Winter 2024 contracts.

The record activity observed in the Asia LNG MOC assessment process comes at a time when market participants are actively trading during the peak winter season, with many using the JKM index in their physical and derivatives positions.

Traders may also be holding divergent views on near-term LNG price direction.

The intermonth market structure between January and February was one of the points of contention among traders as it was observed to be swaying between contango and backwardation structures in November.