Platts: Spot LNG prices for June delivery fell 8.0% on low demand

(May 19, 2014) -- Prices of liquefied natural gas (LNG) for June delivery to Asia fell 8.0% to an average $14.316 per million British thermal units (/MMBtu), according to the just-released Platts Japan/Korea Marker (JKM) for month-ahead delivery. The decline followed unseasonably warm temperatures across much of northeast Asia which weighed on demand. The data reflects the daily Platts JKM for June assessed between April 16 and May 15, expressed as a monthly average.

The Platts JKM for June was 1.7% less than the June 2013 average of $14.565/MMBtu, which followed the year's low of $14.15/MMBtu on May 15, 2013.

The JKM for June 2014 delivery began the trading month at $14.875/MMBtu before closing at $13.625/MMBtu, the lowest level since November 2012.

"Northeast Asian buyers, particularly in Japan and South Korea, are still well supplied due to weaker than anticipated demand in early year," said Stephanie Wilson, managing editor of Asia LNG at Platts, a leading global energy, petrochemicals and metals information provider and a premier source of benchmark price references. "In addition, more LNG supplies are being made available for incremental demand from liquefaction projects in the Asia-Pacific basin, as a few buyers have chosen to take less volume from their term contracts."

"The loss of supply from Angola LNG will likely be offset by incremental volumes available from Indonesia, Malaysia, Russia and the startup of the new Papua New Guinea LNG project in May," Wilson added.

Meanwhile, the price of a competing fuel, thermal coal, was up 1.7% on a month-over-month basis, while fuel oil was down by 0.2% month-over-month during the April 16 to May 15 assessment period.

Platts Spot JKM and Substitute Fuel Prices (Monthly Averages)*
	June-14	June-13	May-14	Year-Over-Year Change %	Month-Over-Month Change %
JKM ($/MMBtu)	14,316	14,565	15,559	-1.7	-8.0
Qinhuangdao coal ($/MMBtu)	3,785	4,040	3,723	-6.3	1.7
180 CST fuel oil ($/MMBtu)	15,403	15,652	15,434	-4.3	-0.2
*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

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.

Platts' monthly reports on Asia LNG prices and market developments are typically published shortly after the 15th of each month. (ends)