ASIA SPOT LNG - Platts June JKM falls 15 cents/MMBtu on abundant supply

Singapore (Platts)--21Apr2013/1054 pm EDT/254 GMT


The Platts June LNG Japan Korea Marker ended the Asian trading week down 15 cents/MMBtu at $14.85/MMBtu, as abundant June cargo availability and limited demand continued to weigh on prices.

The June JKM rolled over Tuesday at $15.00/MMBtu. The fall this week marked the ninth consecutive week of declines in the JKM.

The May JKM ended Monday at $14.95/MMBtu, falling $1/MMBtu over the course of the month, after rolling over at $15.95/MMBtu on March 18.

June bids were reported over a wide range, with some opportunistic North Asian buyers targeting low-$14s for a deal, though a buyer with stronger interest was heard to be bidding in the mid-$14s.

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Several Japanese utilities reiterated that they had no space to receive additional volumes in June owing to high inventories, which had been accumulated through term suppliers and early spot procurement. Various other sources said Japanese and South Korean demand was likely to rebound in July, ahead of the summer months.

June offers remained under pressure, as a lack of North Asian buyers and numerous available cargoes being offered resulted in sellers lowering their June offers to around $15/MMBtu by the end of the week.

Thailand's PTT was the only Asian buyer showing firm demand for June as of yet. The state-owned company issued a buy tender seeking a cargo in June and another in July on a delivered ex-ship basis, sources said. The tender will close on April 23. One industry source said PTT could also draw on Qatari suppliers to satisfy its demand, as seen it had done in previous tenders.

Shell announced on Thursday that it had lifted force majeure on supplies of gas to the 22 million mt/year Nigeria LNG export terminal, after repairing sabotage damage to a major gas trunkline on February 5.

Though the force majeure has remained in place for over two months, LNG loadings from the facility have recently not been largely affected.

A buy tender from Argentina which closed April 9 was also heard partially awarded. The tender, which sought bids for 10 specific delivery slots from May-December, awarded three of the more prompt slots, sources said. BP was heard to have been awarded a cargo for the tender, while Shell was reportedly awarded the other two cargoes.

Platts assessed June DES West India at $14.05/MMBtu Friday, down 20 cents/MMBtu from Tuesday's $14.25/MMBtu, following recent procurements from India and dwindling buying interest in the country ahead of the monsoon season.

A trade source said India's GAIL had already secured its required April volumes for Dabhol from the spot market, and would not need any further spot cargoes from when the monsoon season starts in May until its end in late September.

A West Coast India importer said the heavy rains over June-August would bolster hydropower production in the country, significantly reducing the need for gas -- and subsequently spot LNG -- in the power generation sector.

The Asia Pacific Day Rate fell from $105,000/day to $100,000/day, as chartering interest was low amid spare shipping length in Asia and a bearish spot cargo market, which would cap the margins on diversion opportunities to the region.

--Max Gostelow, max_gostelow@platts.com

--Stephanie Wilson, stephanie_wilson@platts.com

--Edited by Jonathan Fox, jonathan_fox@platts.com



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