GLOBAL LNG-Asian LNG prices drop as buyers pull back

Spot prices for liquefied natural gas (LNG) in Asia fell this week as demand from end-users was hampered and suppliers offered more cargoes.

The average LNG price for August delivery into Northeast Asia LNG-AS was estimated at about $12.55 per metric million British thermal units (mmBtu), down $1.45 from the previous week, trade sources said.

The price for a cargo delivered in September is estimated to be about $12.75 per mmBtu, they added.

“The market was overheated and there was a lot of optimisation but no real end-user buying… so there is some profit-taking happening now,” one of them said.

“The suppliers who have been buying cannot afford to wait anymore for new demand to come in, so they have to either sell them cheaper or risk losing money by holding on to the cargoes when there is no demand.”

Pakistan LNG likely did not award a tender seeking a cargo for delivery in September, trade sources said.

Buying appears to have slowed from China, the world’s second largest LNG importer, though some spot purchases were seen from Japan and South Korea, they added.

Japan’s Tohoku Electric bought a cargo for delivery in the second-half of August at about $14.40 per mmBtu while South Korea’s Prism Energy bought a cargo for September delivery at $14.50 per mmBtu, they said.

Temperatures in Tokyo, Seoul and Beijing are expected to be warmer than usual over the next two weeks, Refinitiv Eikon weather data showed, which also prevented prices from falling further.

Argentina’s Integracion Energetica Argentina (IEASA) bought four partial cargoes for delivery over August to September into the Escobar terminal at about $13.50 per mmBtu, one source said.

Woodside Petroleum WPL.AX said on Friday that it is rectifying a corrosion issue identified during planned maintenance at the Karratha gas plant in western Australia.

It was not immediately clear how serious the issue is, but one source said loadings for August are normal for now.

On the sell side, Russia’s Sakhalin offered a cargo for August, while Australia’s Ichthys’s LNG, Indonesia’s Pertamina and Russia’s Novatek offered cargoes this week, sources said.
Source: Reuters (Reporting by Jessica Jaganathan; Editing by Shailesh Kuber)

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