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Platts JKM™ (Japan Korea Marker) Gas Price Assessment: Natural Gas Price Assessments

What is the Platts Japan Korea Marker (Platts JKM™)?

Platts JKM™ is the LNG (Liquefied Natural Gas) benchmark price for spot physical cargoes referenced in contracts both in Northeast Asia and globally. Platts JKM™ reflects delivered ex-ship spot LNG prices for cargoes delivered into Japan and South Korea, the world’s two largest LNG importers, which, combined, account for nearly 50% of global LNG demand. Trades into China and Taiwan are also captured in Platts JKM using a process of freight normalization.

Global LNG trade patterns are evolving rapidly. Where cargoes once changed hands only through opaque bilateral deals, the market now exhibits open sell and buy tenders for multiple and single cargoes, brokered trades, cargoes sold in longer chains and speculative trading positions taken up by non-traditional players, adding to spot market liquidity. This trend is currently particularly prevalent in Asia, the region that accounts for around 70% of global LNG demand.

The Platts JKM™ Price Assessment is available in these services.

How do we assess Platts JKM™?

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Platts JKM™ reflects the daily tradable value of a spot LNG cargo at the given delivery period, based on trades, bids and offers observed by S&P Global Platts pricing specialists.

Platts LNG assessments are market-on-close (MOC) prices prevailing at 16:30 Singapore time or 08:30 GMT on a standard ship size.

During the Platts JKM™ daily price discovery process, we survey as broad a cross-section of the market as possible, including traders, producers, shippers, end-users and brokers. Market players are regularly contacted by phone, instant message, email or face to face meetings.

Information pertaining to current shipping costs and market supply/demand fundamentals - such as production maintenances, tender issues, shipping and cargo movements and weather data - is also taken into consideration during the Platts JKM™ price assessment process.

We publish reported bids, offers and trades during our Platts MOC assessment process every day through real-time services, Platts Natural Gas Alert and Platts LNG Navigator.

Evolution of Platts JKM™

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Platts was the first Price reporting Agency to launch daily LNG price assessments for cargoes trading in Asia, starting with Platts JKM™ in February 2009. As global supply and market participation grew, the uptick in liquidity of spot trading has seen the Platts JKM™ become progressively used as the price benchmark for spot trades both in and outside Asia. In addition, Platts JKM™ pricing has also increasingly been incorporated into many term LNG contracts worldwide.

Spot and short-term trades generally represent 25-30% of the LNG volumes traded annually.

While the LNG market continues to be dominated by legacy long-term contracts, there is a marked movement towards shorter-term and spot deals. Long-term contracts expose both buyers and sellers to market risks, as price fluctuations cannot be captured. Most LNG term contract pricing remains linked to oil prices, but this is also being eroded as market participants seek indexation methods which more closely reflect the supply/demand fundamentals of the LNG market. Daily LNG spot prices mitigate this risk by reflecting the actual tradeable market value for LNG bought and sold each day, making the inherent market volatility both visible and understandable.

New entrants into the LNG market are pushing for shorter-term and spot deals, instead of the traditional long-term agreements. Traditional LNG importers are re-enforcing this trend, partly to help manage their uncertain LNG demand outlooks. On the supply side, increasing non-associated gas production and shale gas development also makes oil indexation less relevant for LNG pricing. LNG stakeholders therefore require a reliable, transparent marker to reflect the fair and transactable value of the spot LNG market. Platts JKMTM provides this in physical markets.

In additional to physical pricing assessments, Platts JKM™ has also been adopted in the financial markets, spearheaded by OTC derivatives trades in early 2011 as well as exchange cleared trade which took place from mid-2012. Platts then launched daily Asian LNG swaps assessments, under the name DES Japan/Korea Marker (Platts JKM™) swaps, in June 2012.

Platts JKMTM swap assessments are published on a daily basis following editorial engagement with market participants such as producers, consumers, traders, brokers, shippers and other active spot market participants. The Platts JKM™ swap is typically financially settled based on the physical spot Platts JKM™ assessments published. Trade in Platts JKM™ swaps has grown exponentially in recent years due to their rising usage by a variety of LNG market participants, partly for hedging.

Platts JKM™ LNG Price Assessment Methodology

How do you access the daily JKM™ LNG price?

The JKM™ LNG market price assessment can be accessed in the following Platts services.

Market Price Data – Natural Gas

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Natural Gas Alert

  • Get a complete picture of the global natural gas market, delivered in real time
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LNG Daily

  • Get a daily PDF with the JKM™ and other price assessments for the global LNG market
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