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Muted trading leaves Nov JKM stagnated again

By Chloe Hang in Singapore

September 23, 2013 - Muted trading in the spot market Monday left the Platts November LNG Japan Korea Marker stagnated again at $15.75/MMBtu, unchanged for the fifth consecutive session.

Japan was closed for a public holiday Monday, further limiting spot activity. As a result, there were no exact bids or offers heard for November shipments.

However, sources said the standoff between buyers and sellers persisted for November deliveries, despite the healthy appetite for spot cargoes and ample cargo availability in both the Pacific and Atlantic basins.

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But in terms of spot cargo offers, most volumes were originating from the Atlantic Basin, whereas spare volumes from Asia were heard marketed to term buyers first.

Compared with the same period in 2012, sources said, overall demand was weaker this year, with an Asian buyer saying there was little upside to LNG demand in Japan as it was already maxed out and neighboring South Korea also has high inventory.

With South Korea's state-owned importer Kogas yet to be actively seeking winter cargoes in the spot market, the Asian buyer said he pegged spot cargoes at $15.50-15.60/MMBtu for delivery in the second half of November.

The gap in price expectations spilled over into December, with bids and offers more than a dollar apart for the month, sources said. Discussions were still in the preliminary stages, with the highest December bid heard at less than $16/MMBtu against the lowest offer around $17/MMBtu Monday.

The market was still waiting for Angola LNG to issue its sell tender for the fourth export cargo, sources said. The Sonangol Benguela was observed heading toward Soyo, according to data from Platts ship tracking tool cFlow. The cargo could possibly be loaded Monday, a source said, but that could not be confirmed with the company.

The third export cargos from Angola, on board the Lobito, was still off the coast of Malaysia's Bintulu LNG project.

In the paper market, JKM swaps were unchanged Monday at $16.40/MMBtu for December, $16.85/MMBtu for January and $17.00/MMBtu for February, in line with steady underlying physical prices.

Next page: - October JKM flat on wide buy-sell gap

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