(EnergyAsia, December 19 2012, Wednesday) — Asia liquefied natural gas (LNG) spot prices for month-ahead delivery surged 15.5% in December from November to $15.63 per million British thermal units (mmBTU), said energy media Platts.
That is the price based on the company’s latest monthly Japan/Korea Marker (JKM) data derived from an assessment of LNG prices for spot cargoes delivered to Japan and South Korea. The monthly JKM assessments reflect prices for cargoes for month-ahead delivery and are an average of the daily JKM price assessments reported by Platts.
Sarah Cottle, Platts’ editorial director for power, said:
“Spot market prices for January-delivered LNG were affected by increased demand from North Asian utilities, especially after colder-than-average winter weather forced them to start drawing heavily on their inventories.
“However, in more recent days following the restart of previously shut plants like Nigeria LNG and Indonesia’s Tangguh LNG, buyers showed reluctance to raise their bids, despite otherwise tight supply fundamentals.”
The latest monthly Platts JKM average for month-ahead delivery, or delivery in January 2013, was assessed over the period of November 16 to December 14, 2012.
On a year-over-year basis, the Platts JKM price assessment for January 2013 delivery, as assessed in December 2012, was down 9.4% from the Platts JKM price assessment for January 2012 delivery, as assessed in December 2011, when strong demand from Japanese utilities to replace lost nuclear power generation caused prices to rise to $17.25 per mmBTU.
The rise in the December month-ahead spot LNG price for cargoes to be delivered in January 2013 compares to a 4.0% month-on-month gain in LNG spot prices seen for December-delivered shipments.
According to Platts, this is the fifth consecutive month that the price for month-ahead-delivered cargoes has fallen on a year-over-year basis, after the Platts JKM recorded its first ever year-on-year decline for September-delivered cargoes in August.
The January average was assessed over the period of November 16-December 14.
Meanwhile, the prices of substitute fuels, thermal coal and fuel oil, which are alternatively used by Asian utilities, dropped 3% and 2% respectively for the month, said Platts.