SINGAPORE: Asian spot liquefied natural gas (LNG) prices slid to an over eight-month low this week, weighed by weak demand, high stocks and concerns of a global recession triggered by U.S. President Trump’s implementation of worldwide tariffs.
The average LNG price for May delivery into north-east Asia <LNG-AS> was at $12.50 per million British thermal units (mmBtu), the lowest level since late July, industry sources estimated.
The June delivery price was estimated at $11.30/mmBtu.
“Asian LNG prices are under pressure amid weak seasonal demand, high inventories and recession concerns tied to elevated U.S.-China trade tensions,” said Kpler analyst Go Katayama, referring to stockpiles in Japan and Korea.
While the 90-day tariff pause by the U.S. has sparked optimism, it is limited, and the continuation of tariffs on Chinese goods keeps market sentiment cautious, he added.
“Restocking in Northeast Asia remains subdued and is unlikely to pick up unless prices drop below $12/mmBtu or weather forecasts shift hotter.”
Trump’s sweeping tariffs on dozens of countries roiled global markets this week, spurring concerns of a recession and an escalating trade war between China and the United States.
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LNG importers in China, the world’s top buyer of the fuel, are re-selling U.S.-sourced cargoes as the tit-for-tat tariffs drive up import costs.
China’s halt in U.S. LNG imports is likely to continue, while muted gas demand growth will curb incremental LNG demand, said Rystad analyst Wei Xiong.
“The ongoing trade tensions and higher tariffs may heighten the downside that the industrial sector has been facing, as the export economy is likely to slow,” she said.
In Europe, S&P Global Commodity Insights assessed its daily North West Europe LNG Marker (NWM) price benchmark for cargoes delivered in May on an ex-ship (DES) basis at $10.127/mmBtu on April 10, a $0.805/mmBtu discount to the May gas price at the Dutch TTF hub.
Argus assessed the price for May delivery at $10.195/mmBtu, while Spark Commodities assessed it at $10.184/mmBtu.
“European demand has still held strong relative to Asian demand during the price fall this week, with the west African inter-basin arbitrage holding closed, as Angola LNG sold a spot cargo to France instead of Asia,” said Martin Senior, head of LNG pricing at commodities pricing agency Argus.
Meanwhile, the U.S. front month arbitrage to north-east Asia via the Cape of Good Hope briefly reached breakeven levels on Monday amid the U.S. tariff announcements, before closing out and pointing to Europe again, said Spark Commodities analyst Qasim Afghan.
In LNG freight, Atlantic rates dropped for a third week to $22,500/day on Friday, he added, while Pacific rates fell to $24,750/day.
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