Sunday, 28 November 2021

Asian prices climb as Japan swelters

TOKYO: Asian spot liquefied natural gas (LNG) prices rose for a second consecutive week as sizzling high temperatures continued to grip Japan, the top buyer of the super-chilled fuel.

Spot prices for September delivery in Asia rose to $10.00 per million British thermal units (Btu), up 25 cents from the previous week, while prices for October delivery were at $10.40 per mmBtu, industry sources said.

Scorching conditions in Japan, where temperatures have risen to record highs in recent weeks, are expected to continue in August with Thomson Reuters Eikon data showing well above average temperatures in the country for the next 15 days

Japan’s biggest electric utilities are firing up old fossil fuel power plants and ramping up others that are already operating, pushing to meet demand as power prices hit record highs amid the deadly heat-wave.

Temperatures in Seoul and Beijing are also expected to be above average over the next 15 days, but are expected to moderate over the period, the Eikon data showed.

Japan’s Tohoku Electric has a tender seeking 2 LNG cargoes for September delivery while Kansai Electric has bought 2 to 3 cargoes a month, with the latter being in a sell position just a few months ago, a Japan-based industry source said.

“How much more (Japan needs to buy LNG) will depend on the weather, but this heat is expected to continue for a while which will prompt more demand and tighten the market,” the source added.

South Korean steelmaker POSCO bought a cargo for delivery in October, a second industry source said. South Korean utility Komipo had earlier sought a cargo for November but it was not immediately clear if the tender has been awarded.

Indian demand was also firm post-monsoon, with gas distributor Gail India seeking a cargo for delivery in the second half of October.

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