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Prices of liquefied natural gas (LNG) for June delivery to Asia fell 5.8% to $14.565 per million British thermal units (/MMBtu), as spot demand has failed to rebound in the past few months, according to the latest monthly Platts Japan/Korea Marker (JKM) for month-ahead delivery. The monthly average Platts JKM for delivery in June was assessed over the period of April 16 to May 15.
The June-delivery price decline followed a 12.3% price drop from May delivery and marked the third consecutive month-over-month drop in spot LNG price. Despite the approach of the traditionally strong summer demand season, spot demand showed little sign of recovering, given ample stockpiles and North Asian buyers’ increased reliance on inventory from long-term contracts to cover their requirements.
On a year-on-year basis, the June Platts JKM was down 16.4% from the 2012 June-delivery level of $17.423/MMBtu.
“The bearish mood was also weighed down by the robust supply situation, with spot cargoes offered out of both the Pacific and Atlantic Basins, alongside European reload activity,” said Sarah Cottle, global editorial director of power, for Platts, a leading global energy, petrochemicals and metals information provider and a premier source of benchmark price references. “Cargo availability was further boosted by Nigeria LNG and Norway's Hammerfest LNG resuming normal operations. In addition, power-saving measures in Japan will continue to limit LNG consumption, particularly as current temperatures in the country are mild and weather forecasts show expectations of normal summer weather.”
Meanwhile, the month-ahead spot prices of thermal coal and fuel oil, which are substitute fuels burned by Asian utilities, dropped 0.4% and 3.0%, respectively, according to the latest Platts month-over-month data for June.
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Platts Spot JKM and Substitute Fuel Prices (Monthly Averages)* |
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June-13 |
June-12 |
May-13 |
Year-On-Year Change % |
Month-On-Month Change % |
|
JKM ($/MMBtu) |
14.565 |
17.423 |
15.464 |
-16.4 |
-5.8 |
|
Qinhuangdao coal ($/MMBtu) |
4.04 |
5.26 |
4.06 |
-23.2 |
-0.4 |
|
180 CST fuel oil ($/MMBtu) |
15.65 |
18.10 |
16.13 |
-13.5 |
-3.0 |
|
Source: Platts
*Referred to as month-ahead, the figures in the table are monthly averages of daily values assessed by Platts from April 16th to May 15th. The Platts JKM rolls on the 16th of each calendar month
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The Platts JKM is an assessment of LNG prices for spot cargoes delivered to Japan and South Korea, based on the most recent trades and/or bids and offers from buyers and sellers in the open market prevailing at the close of the trading day. The monthly JKM assessments are month-ahead delivered prices and are an average of the daily JKM price assessments reported by Platts.
For more information on natural gas or the methodology used by Platts in its power assessments, visit the Platts website www.platts.com.
Platts’ monthly reports on Asia LNG prices and market developments are typically published shortly after the 15th of each month.
