--DES Northeast Asia

In the DES Northeast Asia market last week, front month delivery, first-half March fell further, hovering around $9.15-9.45 once. Softened Netherlands' TTF market as well as dull demands from Northeast Asia's end-users, who held ample inventory, which in turn caused perceptions of oversupply, weighed on prices. Amid this, moves from Japanese end-users who have been silent for while, were seen in the market.

Kansai Electric Power Co (KEPCO) has issued a buy tender to buy a total of 12 cargoes, one cargo each month, from Apr 2024 to Mar 2025. The company needed to procure LNG for gas-firing power plants as an alternative in response to the extension of resuming 870MW No.4 unit at Takahama nuclear power station, where troubles occurred. Moreover, "KEPCO's long-term contract for receiving cargoes from the 16.30 mil mt/year North West Shelf project in Australia will expire in 2024, which reduced more than 1 mil mt/year of supply for the company. As a result, KEPCO might have moved to sign a one-year deal this time" (a Japanese company) was heard. KEPCO was supposed to expire its long-term contract for receiving cargoes from the 4.90 mil mt/year Pluto project in 2025 as well.

For talks on long-term contracts, Hokkaido Gas appeared to have bought three or four cargoes annually for a minimum of five years starting 2027 through a buy tender that was closed on Sep 26 last year. While details, such as the winner in the tender, were unknown, five candidates--British BP, French TotalEnergies, Italian ENI, JERA, and Marubeni Corp--were heard in the final round of the tender. The awarded price in the tender might be expensive because Hokkaido Gas demanded more cargo delivery in winter.

In China, on the other hand, Shenzhen Energy purchased a cargo for first-half March delivery in the low $9's. In South Korea, major steel manufacturer POSCO bought two cargoes in total for February to March delivery this week. A portfolio player stated, "If the market is in the low $9's, the level must be below importing costs of long-term cargoes. It makes sense that end-users feel the market attractive and buy spot cargoes."

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

Indian state-run Gujarat State Petroleum Corp (GSPC) closed a buy tender on a DES basis for a Feb 15-19 delivery cargo on Jan 25. As reported, the company had bought a Feb 16-18 delivery cargo at about $9.40 via its buy tender that had closed on Jan 18. A Japanese company,however, pointed out, "Most end-users in South Asia have bought spot cargoes just because of reasonable price. They are not urged to buy spot cargoes."

--FOB Atlantic, DES Europe and South America

In Europe, the arrival of storm "Jocelin" pushed the Netherlands' TTF market down. Jocelin has been counted as the tenth storm to hit Europe since last autumn. A storm is usually regarded as a bearish factor in the market because it brings warm air and reduces gas demand for power plants through raising outputs from wind power plants. in South America, spot demand from Colombia was brisk.