Houston — The Platts JKM, a spot-market price index of the Asian LNG market, dipped to an eight-week low Tuesday when February-delivery cargoes to Northeast Asia were assessed at $7/MMBtu.
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The JKM has been on the decline since early December as new production from the Asia Pacific LNG and Gladstone LNG export facilities in Australia continue put pressure on an already-saturated spot market.
Earlier this week offer prices to dipped into the low-$7s/MMBtu as limited demand from end-users in the Asia Pacific region met with additional supply heard on offer from Papua New Guinea LNG and Russia's Sakhalin.
Amid market discussion of recent spot deals concluded around $7/MMBtu to Japanese power utility Kansai Electric and PetroChina, portfolio sellers moved Tuesday to size up remaining demand for the period.
At least three cargoes were offered at $7.00-$7.10/MMBtu from Nigeria and Gladstone, market sources said. Additional Australian-sourced lean-gas cargoes were also heard on offer, reportedly below $7/MMBtu. The offers however, made for commissioning cargoes on an FOB basis with no guaranteed loading date, were not entirely reflective of fair-market value.
On Wednesday, sentiment weakened further as many market participants expected that sellers who were unsuccessful in their bid to supply Pakistan State Oil's prompt, 7-cargo tender, would likely reoffer their volumes into the market, putting still more pressure on prices.
The JKM dipped to a 5-year low in early October at $6.50/MMBtu as crude-linked supply contracts, excess production and weak demand -- stemming from alternative power sources and mild-weather--pushed the price index to lows not seen since the days prior to the Fukushima nuclear disaster.
The JKM was assessed flat Wednesday at $7/MMBtu with H1 February at $7.10/MMBtu and H2 February at $6.90/MMBtu, Platts data showed.