LONDON: Asian spot liquefied natural gas prices declined this week on lacklustre demand and are expected to remain under pressure as ample inventories and stronger Chinese gas production limit interest in spot purchases.
The average LNG price for November delivery into north-east Asia LNG-AS was $11.20 per million British thermal units (mmBtu), down from $11.50/mmBtu last week, industry sources estimated.
“Looking ahead, Asian LNG prices are expected to remain slightly bearish into next week, pressured by stronger domestic gas production and higher underground gas storage withdrawals in China and ample regional LNG inventories,” said Go Katayama, LNG and gas analyst at data analytics firm Kpler.
“In China, upward revisions to domestic gas production forecasts for September–December 2025, combined with higher forecasted underground gas storage withdrawals in November, are set to displace additional spot LNG demand and add bearish pressure on Asian prices,” Katayama added.
EUROPEAN PRICES KEEP TO TIGHT RANGE
In Europe, prices were up slightly on Friday morning but remain within their recent tight range as the gradual end of the maintenance season in Norway lifts supply while strikes in France curb LNG deliveries.
Disruption due to the strikes at French LNG terminals is expected to last for the rest of September. This has raised prompt gas prices in France and led sellers to bring cargoes to other LNG terminals in northwest Europe, said Xiaoyi Deng, Argus deputy head of LNG pricing.
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For the week ahead, Kpler maintains a stable outlook for the TTF front-month contract, as ample pipeline and LNG supply should help balance a gradual decrease of renewable generation and lower Algerian piped flows to the EU, Katayama said.
The lack of competition from Asia has reduced the urgency to procure for winter amongst European market players.
Thirty-two vessels are heading to Europe carrying 1.30 million cubic meters of LNG over the next 14 days, according to data intelligence firm Orbify.
S&P Global Commodity Insights assessed its daily North West Europe LNG Marker (NWM) price benchmark for cargoes delivered in November on an ex-ship (DES) basis at $10.954/mmBtu on September 25, a $0.65/mmBtu discount to the November futures price at the TTF hub.
Argus assessed the price at $10.680/mmBtu, while Spark Commodities assessed the October price at $10.517/mmBtu.
In Egypt, laden LNG vessels have formed queues outside floating storage units this week as a result of scheduling issues at the terminals, Argus’ Xiaoyi Deng said.
The U.S. front-month arbitrage to north-east Asia via the Cape of Good Hope is still incentivising U.S. cargoes to deliver to Europe, the same as the arbitrage via the Panama Canal, said Spark Commodities analyst Edward Armitage.
Global LNG freight rates in the Atlantic dropped for the second week to their lowest rate in over five months at $21,500/day. Pacific rates also softened for the fifth week running to $25,250/day, he added.
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