Platts: Asia Spot LNG Prices for May Delivery Fell 12.3% on Low Demand

On a year-over-year basis, May prices were down 3.3% versus 2012

Singapore - April 17, 2013

Prices of liquefied natural gas (LNG) for May delivery to Asia fell 12.3% to $15.464 per million British thermal units (/MMBtu) on decreased demand, according to the latest monthly Platts Japan/Korea Marker (JKM) for month-ahead delivery. The monthly average Platts JKM for delivery in May was assessed over the period of March 18 to April 15.

The May-delivery price decline followed a 7.9% price drop for April delivery and marked the second consecutive month-over-month drop in spot LNG price due to weak demand during the so-called shoulder months, between the winter and summer peak LNG demand seasons in North Asia.

On a year-on-year basis, the May Platts JKM was down 3.3% from the 2012 May-delivery level of $15.986/MMBtu, which was held high by demand outstripping the limited supplies from the Pacific and Atlantic Basins.

“This year, supplies were more than enough to satisfy North Asia’s smaller appetite for spot cargoes,” said Sarah Cottle, editorial director of power, Asia and Europe, for Platts, a leading global energy, petrochemicals and metals information provider and a premier source of benchmark price references. “Besides the comfortable weather easing price pressures, buyers had accumulated sufficient inventory in advance and addressed spot procurement needs early,” Cottle explained, “such that there was less competition for May cargoes later in the month and prices eased.”

Meanwhile, the month-ahead spot prices of thermal coal and fuel oil, which are substitute fuels burned by Asian utilities, dropped 1.2% and 1.8%, respectively, according the Platts’ latest month-over-month data for May.

Platts Spot JKM and Substitute Fuel Prices (Monthly Averages)*

May-13 May-12 April-13 Year-On-Year Change % Month-On-Month Change %
JKM ($/MMBtu) 15.464 15.986 17.636 -3.3 -12.3
Qinhuangdao Coal ($/MMBtu) 4.06 5.15 4.11 -21.3 -1.2
180 CST Fuel Oil ($/MMBtu) 16.13 19.04 16.42 -15.3 -1.8

Platts’ monthly reports on Asia LNG prices and market developments are typically published shortly after the 15th of each month
Source: Platts

*Referred to as month-ahead, the figures in the table are monthly averages of daily values assessed by Platts from February 18th to March 15th. Platts JKM rolls on the 16th of each calendar month.

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