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Japan LNG spot price falls to $10.20/mmBtu in Jan

TOKYO – Liquefied natural gas (LNG) spot prices for Japanese buyers fell for the third straight month in January, Japan’s trade ministry said on Tuesday, as winter demand failed to materialize to the extent hoped.

Spot LNG contracted in January for delivery to Japan averaged $10.20 per million British thermal unit (mmBtu), down from $11.60 a month earlier, the Ministry of Economy, Trade and Industry (METI) said. Cargoes arriving last month averaged $13.90 per mmBtu, compared with $15.10 in December.

Traders said Japanese utility Tohoku Electric in January purchased an LNG cargo for delivery in the third week of March at a price in the low $7 per million British thermal unit (mmBtu) range.

Asian spot liquefied natural gas prices slipped to trade at a discount to European prices for the first time since 2011, as weak demand weighed, traders said on Friday.

Japan, which takes about a third of the world’s LNG imports, shipped in a record 88.51 million tonnes last year due to the extended shutdown of nuclear plants, but some analysts expect imports to fall this year as some reactors are expected to resume operations.

Japan started releasing spot LNG prices in April 2014 to add transparency to the market amid concerns about rising fuel costs in the wake of the shutdown of nuclear plants after the Fukushima crisis. The average spot price is based on about 10 percent of the nation’s purchases of the super-chilled fuel.

The METI survey looks at samples of fixed prices for LNG sold to power companies and utilities among others, and excludes spot deals linked to benchmark prices such as the U.S. natural gas Henry Hub index.

For the monthly price report from METI, click here.

The following table lists monthly prices for LNG in million British thermal units for spot cargoes contracted during the month and for those that arrived during the month.

Month Contract Price Arrival Price
March $18.30 n/a
April $16.00 $18.30
May $14.80 $16.30
June $13.80 $15.00
July $11.80 $13.80
August $11.40 $12.50
September $13.20 $11.30
October $15.30 $12.40
November $14.40 $14.30
December $11.60 $15.10
January $10.20 $13.90


(Reporting by Osamu Tsukimori; Editing by Sunil Nair)

This article was from Reuters and was legally licensed through the NewsCred publisher network.

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