Asia: LNG prices continue to rise

In Asia, liquefied natural gas prices continued their upward trend. In Asia, liquefied natural gas prices continued their upward trend. Demand remains firm in the region.

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In Asia, liquefied natural gas (LNG) prices continued their upward trend.
Demand remained firm in the region.
However, an increase in cases of coronavirus in China, the world’s second largest importer of LNG, is limiting price growth.

Asia faces rising gas prices

The average LNG market price for September 2021 deliveries in Northeast Asia has been estimated at around $17.05 mmBtu.
This is up $0.15 on the previous week, according to Reuters.
Cargoes for delivery in October 2021 are estimated at around $17.30 per mmBtu, Asian LNG demand was driven by South Korea.
Where limits on coal production, hot weather and depleted stocks stimulated imports.
And by China, which recorded a 27% jump in LNG demand in July 2021.
This, despite the latest data indicating that utilization rates for gas-fired power plants have begun to decline.
In addition, shipping disruptions in China due to cases of coronavirus could also weigh on prices.
Global gas prices have thus risen sharply this summer.
This is due above all to the combination of strong Asian demand and very low European inventories.
A situation that is likely to persist as winter approaches.

Strong Asian demand in tenders

In the tenders, demand was firm from Asia, with several companies seeking or buying cargoes.
Japan’s Kansai GS and SK Energy bought a cargo for September delivery at around $17/mmBtu. Indian Oil Corp bought a cargo for delivery in September 2021 at around $16.60 to $16.70/mmBtu.
While China’s Shenzhen Energy bought a cargo for delivery in August at around $16.20/mmBtu.
China’s Guangdong Energy closed a tender for 13 cargoes for delivery in June 2022.
ArcelorMittal Nippon Steel India is looking for 80 cargoes to be delivered between 2024 and 2030.
India’s Torrent Power is looking for 34 cargoes to be delivered between 2022 and 2026.
India’s Gail has also launched a tender for 12 cargoes to be loaded in the USA.
The company is looking for 12 cargoes to be delivered in India between 2021 and 2022.

Australian gas prices set to rise

Despite the abundance of gas in Australia, the domestic price jumped significantly.
This was not absorbed by LNG exporters, who pumped more supply onto the Australian market.
China, despite its trade dispute with Australia, bought record quantities of gas from that country during 2021.
Australia exported a record 30.7 million tonnes to China during the year.
This represents a value of around $15.6 billion, according to EnergyQuest.
The previous record was 28.6 million tonnes in 2019-20.
Deliveries from Australia rose by 7.3% last year, despite trade tensions and China.
The latter is now said to have overtaken Japan as Australia’s biggest LNG customer.
Coal-fired electricity also continues to decline in Australia.
Still in a tense context with China.
EnergyQuest reports that China accounted for only 64% of total electricity production in July 2021, down from 67% a year earlier.

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