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(Bloomberg) — Chinese firms are purchasing liquefied natural gas shipments from the spot market, a reversal of months of relative inactivity from the world’s top buyer, after prices slumped to the lowest level in about a year.
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At least two shipments were procured last week at the $10 per million British thermal units level, according to traders with knowledge of the matter. More buying may materialize this week if prices remain in this range, the traders added.
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The move is a u-turn for Chinese LNG buyers, which had reduced imports and resold shipments because expensive gas was not attractive to a weaker domestic market. China was the biggest LNG importer in 2024, but deliveries have slumped about 24% from January to April compared with the same period last year.
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Consistent purchases by China and others may help slow the recent decline in Asian and European gas prices. Spot benchmarks in both regions have fallen amid fears that the global trade war could result in an economic slowdown.
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“Prices at the moment are weak,” FGE Chairman Emeritus Fereidun Fesharaki said on Bloomberg Television. “By the end of this year, prices could go 50%-60% higher than they are today.”
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Price-sensitive Indian companies have upped procurement, traders added. Indian Oil Corp. bought a cargo late last week for June delivery, and Gail is seeking a shipment in a tender that closes this week, the traders said.
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More News:
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- Gail is seeking to purchase an LNG cargo on a DES basis for June 14-18 or June 20-30 delivery to India
- Angola LNG offered to sell a cargo on a DES basis for May to June delivery to locations including South America, Europe, the Middle East, South Asia, Southeast Asia and North Asia
- Rupantarita Prakritik Gas Co. Ltd. is seeking to buy an LNG cargo on a DES basis for June 26-27 delivery
- Indian Oil Corp. purchased an LNG cargo on a DES basis for June delivery at the mid-$10/mmbtu range
- The Arctic Mulan, which exported fuel from a sanctioned Russian facility last year, has made a rare journey through the Red Sea toward Asia, according to ship-tracking data compiled by Bloomberg.
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Drivers:
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- European natural gas edged lower as prospects for energy demand fail to keep pace with the outlook for supply
- The European Union is set to propose measures to ban Russian gas imports by the end of 2027, as the bloc pushes to sever ties with the country that was once its biggest energy supplier
- The drop in oil prices could make long-term LNG supplies more attractive
- READ: Oil Sinks as OPEC+ Supply Surge Threatens to Swamp Global Market
- Estimated flows to all US export terminals were ~15 bcf/day on May 4, down 1.9% w/w: BNEF
- READ: Cameron LNG Starts Planned Maintenance on One of Its Three Units
- READ: Freeport LNG Power Readings Dip for the Second Time this Week
- China’s 30-day moving average for LNG imports was 148k tons/day on May 1, ~20% lower than the 5-year average, according to ship-tracking data compiled by Bloomberg
- European gas storage levels were ~41% full on May 3, compared with the five-year seasonal average of ~51%
- Next-day power prices in Japan slipped 2.8% week-over-week, a relatively mild move for the market, as temperature forecasts are roughly within normal levels for this time of year
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Buy tender:
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Sell tender:
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—With assistance from Anand Menon, Yongchang Chin and Haslinda Amin.
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(Updates with additional spot market news after the sixth paragraph.)
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English (US)