Asian spot liquefied natural gas (LNG) prices increased for the first time since late August, driven by rising demand across the region. The average LNG price for December delivery to Northeast Asia climbed to $13.50 per million British thermal units (mmBtu), marking its first weekly gain in six weeks, according to industry sources.
“Active buyers in the spot market are primarily from South and Southeast Asia, with some Japanese players entering the market for December deliveries,” noted Siamak Adibi, director of gas and LNG supply analytics at consultancy FGE.
Despite the uptick in spot market activity, overall market sentiment remains largely unchanged. European gas storage levels are above 95%, reducing competition between Europe and Asia for LNG cargoes. “The prompt market sentiment remains bearish for now,” Adibi added.
Recent tenders include Thailand’s Hin Kong Power, B.Grimm Power, and state-controlled PTT, all seeking December LNG deliveries, according to a report by Rystad Energy. With Thailand’s monsoon season ending in October, a potential drop in hydropower generation could increase the country’s reliance on gas-fired power.
The report also indicated that Northeast Asian buyers may take a slower approach to winter preparations, as warmer-than-usual temperatures and healthy storage levels could reduce the need for immediate spot purchases.
In Europe, S&P Global Commodity Insights assessed the daily North West Europe LNG Marker (NWM) for December delivery at $12.539/mmBtu on October 17, slightly lower than Dutch TTF hub gas prices. Argus and Spark Commodities both reported similar assessments for November and December deliveries, around $12.50/mmBtu.
Alex Froley, senior LNG analyst at ICIS, pointed out that high storage levels and steady output could lead to significant price drops this winter if weather conditions remain mild, as seen in the past two years. He also highlighted the uncertainty around Middle East conflicts, U.S. elections, and weather risks that could affect future LNG market movements.
LNG freight prices in the Atlantic dropped to $26,750 per day on Friday, the largest week-on-week decline since January, according to Spark Commodities analyst Qasim Afghan. Pacific freight rates also fell, marking the tenth consecutive week of declines, down to $42,250 per day.
