--DES Northeast Asia

In the DES Northeast Asia market last week, front month delivery, first-half March, dropped lower than $9.50 for the first time since mid-June 2023. Ample spot supply and weakness in natural gas prices in Europe weighed on the market.

Several sources reckoned that domestic LNG prices by truck in China were sharply falling to Yuan 4,800-5,000/mt. An end-user in China said, "With the Lunar New Year holidays approaching, factories have stopped operations and gas demand for industrial use has drastically decreased." A power company in eastern Japan pointed out that domestic gas demand was not necessarily strong for the reason of delays in economic recovery, active usage of coal-fired plants and imports of natural gas from Russia via pipelines. With a downward trend in the domestic LNG market by truck expected to continue, the Chinese end-user saw that even if Chinese buyers moved on spot purchase, they would pay about $8.00 or below at most.

In the meantime, most Japanese energy utilities still showed scant interest in spot procurement. A South Korean end-user, however, pointed out, "The current market looks attractive to end-users." In fact, fresh spot demand from Southeast Asia emerged. PTT Public Co (PTT) issued a buy tender closing on January 18 for delivery to the 10.70 mil mt/year Map Ta Phut terminal as well as the 7.50 mil mt/year Map Ta Phut Ⅱ terminal. Through the tender, PTT was seeking three cargoes for Feb 1-2 delivery, Mar 1-2 delivery and Mar 17-18 delivery. As the market was favorable to buyers, PTT might conduct an additional buy tender, according to sources.

--FOB Middle East, DES South Asia and the Middle East

Indian end-users issued tenders one after another. Gujarat State Petroleum Corp (GSPC) floated a buy tender on a DES basis again. Through the tender, GSPC planned to buy a cargo for Feb 16-18 delivery. The tender was closed on January 18. In the Middle East, state-run Qatar Energy reportedly floated a sell tender that would be closed on January 18. The details of the tender were unknown.

--FOB Atlantic, DES Europe and South America

In Europe, Wood Mackenzie, a British research firm, forecasted the weak natural gas demand would continue in 2024 owing to a decrease usage in power sectors, following 2023 when the demand dropped by 7%. The British research firm also estimated the weak LNG prices, saying they "soften further." For delivery to Central America, LNG imports in Puerto Rico have shown a downward trend.