LNG prices under pressure as seasonal demand rises

The spot market price of liquefied natural gas in Asia is falling amid signs that seasonal demand for the fuel is peaking.

Last week saw the first weekly decline in Asian LNG prices in a month, Reuters’ Clyde Russell reported, noting, however, that prices are still more than 66 percent higher than they were at this year’s low in March .

The price of LNG for Asia last week was around $13.80 per million British thermal units, compared with $14.10 for the previous week, which was the highest price in eight months, and up $8.30 from the beginning of March.

Asia is the largest import market for LNG, with major buyers such as Japan, India and China. It was China that raised prices earlier in the year as higher demand for air conditioning led to higher demand for gas for generation. In China, in particular, LNG demand is growing due to an accelerated shift from diesel to the cleaner fuel for trucks, earlier reports suggested.

Reuters’ Russell cited a Wood Mackenzie report that found LNG truck sales in China to grow from less than 10 percent of total sales to 30 percent of sales by the end of 2023.

This month, Asian liquefied natural gas imports will total 25.03 million tonnes, according to Kpler data cited by Reuters, up from 23.86 million tonnes in July.

China imported about 6.94 million tonnes this month, the highest monthly total since January and up from 5.91 million tonnes in July.

Japan, the world’s second-largest LNG importer, bought 5.83 million tonnes of supercooled fuel this month, up from 5.45 million tonnes in July. South Korea’s LNG imports also rose in August to around 3.86 million tonnes, up from 3.16 million tonnes in July.

By Irina Slav for Oilprice.com

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