SINGAPORE, Aug. 20, 2014 /PRNewswire/ -- Prices of spot
liquefied natural gas (LNG) for September delivery to Asia plummeted 33.1% year over year to an
average $10.702 per million British
thermal units (/MMBtu), the latest Platts Japan/Korea Marker
(Platts JKM™) for month-ahead delivery showed. The drop came as
increased supply in the region continued to outweigh lackluster
demand.
On a month-over-month basis, the September JKM was down 5.8%
from August. The data reflects the daily Platts JKM for September
assessed between July 16 and August
15, and expressed as a monthly average.
"The results of Australia's
North West Shelf LNG tender for cargoes loading in September,
October and November showed a steep contango* building into the
traditionally high-demand winter season," said Stephanie Wilson, managing editor of Asia LNG at
Platts, a leading global energy, petrochemicals and metals
information provider and a premier source of benchmark price
references. "This prompted some buyers in Japan to purchase cargoes for October at
prices significantly above those seen in September."
At $10.702/MMBtu, the average
Platts JKM for September was the lowest monthly average on record
since April 2011, and reflected the
largest year-over-year decrease in 2014.
Despite the year-over-year plunge for average September-delivery
prices, the month-over-month decline was the narrowest since March,
when prices began their rapid descent.
After beginning the assessment period at $10.775/MMBtu July
16, spot prices bottomed at $10.525/MMBtu August
1 as a slew of supply tenders in the Asia-Pacific basin hit the market. It was the
lowest daily spot price seen since Friday,
March 11, 2011, when the JKM was $9.90/MMBtu. The spot JKM had spiked to
$10.95/MMBtu on March 15, 2011, in the wake of the Great Eastern
Earthquake and resulting Fukushima crisis in Japan.
The Platts JKM began its rebound on August 8, gaining a total of 40 cents before ending the assessment period at
$11.025/MMBtu August 15. This brought a close to five
consecutive months of declines and reversed the downtrend in spot
prices.
"The removal of deferment clauses on cargoes loading from train
1 of the new ExxonMobil-led Papua New
Guinea integrated LNG project also fuelled the more bullish
sentiment, as traders and sellers can now compete for these cargoes
too," Wilson explained. "On the other hand, end-user inventories
remained high despite higher temperatures in Japan and South
Korea in recent weeks, giving buyers flexibility in their
delivery schedules. Numerous projects in Asia also continued to offer additional supply
to the spot market, which could suggest a cap to potential price
increases."
The prices of possible competing fuels were both down month over
month: Fuel thermal coal and fuel oil were down 6.0% and 2.6%,
respectively, over the July 16 to August
15 assessment period.
Platts
JKM™ Spot and Substitute Fuel
Prices (Monthly Averages)*
|
|
Sep-14
|
Sep-13
|
Aug-14
|
Year-over-Year Change
%
|
Month-over-Month
Change %
|
JKM
($/MMBtu)
|
10.702
|
16.005
|
11.365
|
-33.1
|
-5.8
|
Qinhuangdao coal
($/MMBtu)
|
3.40
|
3.92
|
3.61
|
-13.4
|
-6.0
|
180 CST fuel oil
($/MMBtu)
|
15.38
|
15.77
|
15.80
|
-2.5
|
-2.6
|
Source: Platts
*Referred to as month-ahead, the figures in the table are monthly
averages of daily values assessed by Platts from June 16th to July
15th. The Platts JKM rolls on the 16th of each calendar
month
|
The Platts JKM™ is an assessment of LNG prices for spot cargoes
delivered to Japan and
South Korea, based on the most
recent trades and/or bids and offers from buyers and sellers in the
open market prevailing at the close of the trading day. The monthly
JKM assessments are month-ahead delivered prices and are an average
of the daily JKM price assessments reported by Platts. The monthly
reports on Asia LNG prices and market developments are typically
published shortly after the 15th of each month.
* Contango is the condition whereby prices for nearby delivery
are lower than prices for future-month delivery
About Platts: Founded in 1909, Platts is a leading
global provider of energy, petrochemicals, metals and agriculture
information and a premier source of benchmark prices for the
physical and futures markets. Platts' news, pricing,
analytics, commentary and conferences help customers make
better-informed trading and business decisions and help the markets
operate with greater transparency and efficiency. Customers
in more than 150 countries benefit from Platts' coverage of the
biofuels, carbon emissions, coal, electricity, oil, natural gas,
metals, nuclear power, petrochemical, shipping and sugar
markets. A division of McGraw Hill Financial (NYSE: MHFI),
Platts is based in London with
more than 1000 employees in more than 15 offices worldwide.
Additional information is available at http://www.platts.com.
About McGraw Hill Financial: McGraw Hill Financial is a
leading financial intelligence company providing the global capital
and commodity markets with independent benchmarks, credit ratings,
portfolio and enterprise risk solutions, and analytics. The
Company's iconic brands include Standard & Poor's Ratings
Services, S&P Capital IQ, S&P Dow Jones Indices, Platts,
CRISIL, J.D. Power and McGraw Hill Construction. The Company has
approximately 18,000 employees in 30 countries. Additional
information is available at www.mhfi.com.
SOURCE Platts