Platts JKM™ for July-Delivered LNG Plunged 41.3% from Year Ago on Poor Demand

SINGAPORE, June 16, 2015 /PRNewswire/ -- Prices of spot liquefied natural gas (LNG) for July delivery to northeast Asia averaged $7.600 per million British thermal units (/MMBtu), according to the latest Platts Japan/Korea Marker (Platts JKM®) data for month-ahead delivery.

The figure reflects the daily JKM assessed published by Platts, a leading global energy, petrochemicals and metals information provider and a premier source of benchmark price references, between May 18 and June 15 expressed as a monthly average.

The marker, which gained 6.7% month over month, started the assessment period at $7.750/MMBtu, but weakened over the course of the month to be assessed at $7.300/MMBtu on June 15, even as Asian power utilities entered the traditionally high-demand summer season, when electricity generators have to cope with increased air conditioning use in the northern hemisphere. However, this was 41.3% lower than the same period last year.

"The July market started off very strongly due to production issues at Australia's Northwest Shelf project that resulted in some sellers raising offers quite aggressively," said Max Gostelow, Platts pricing analyst for Asia LNG. "However, the expected demand spike never did materialize, and it quickly became apparent that supply in the region still far outstripped demand, with projects in Malaysia, Indonesia, Papua New Guinea, Russia, and even Australia's Darwin project, having surplus cargoes."

While buyers in Taiwan and Japan entered the spot market to buy several cargoes, most of the demand for July delivery was focused on India, which was the premium market in the Asia Pacific basin. However, by the end of the month, Indian prices had fallen to $7.300/MMBtu, the same price as the JKM, on slower demand due to India's monsoon season, and declining prices in competing markets --such as the UK onshore National Balancing Point gas market. This marked the end of a recent trend that saw Indian prices consistently above the JKM since April 13.

Meanwhile, the price of possible competing fuel thermal coal was up 0.8% on a month-over-month basis, while fuel oil was down 0.6%  month over month during the May 18 to June 15 assessment period.

Source: Platts

*Referred to as month-ahead, the figures in the table are monthly averages of daily values assessed by Platts from May 18^th to June 15^th. The Platts JKM rolls on the 16^th 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.

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 www.platts.com.

About McGraw Hill Financial: McGraw Hill Financial, a financial intelligence company, is a leader in credit ratings, benchmarks and analytics for the global capital and commodity markets. Iconic brands include: Standard & Poor's Ratings Services, S&P Capital IQ, S&P Dow Jones Indices, Platts, CRISIL, and J.D. Power. The Company has approximately 18,000 employees in 30 countries. Additional information is available at www.mhfi.com.

SOURCE Platts

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