Platts JKM™ LNG Prices for October Delivery Posted First Gain Since March
LNG Prices Increased 19.8% Month over Month, but Fell 15.8% Year over Year
LONDON, Sept. 18, 2014 /PRNewswire/ -- Prices of spot liquefied natural gas (LNG) for October delivery to Asia gained 19.8% on a month over month to an average $12.826/MMBtu per million British thermal units (/MMBtu), according the latest Platts Japan/Korea Marker (Platts JKM™) for month-ahead delivery released today at the 2014 Platts LNG Forum in London.
This marked the first month-over-month increase in the Platts JKM since March 2014, triggered in large part by renewed buyer interest in October cargoes given the building contango* in the peak winter months' pricing. The data reflects the daily Platts JKM for October as assessed between August 16 and September 15, and expressed as a monthly average.
The Platts JKM began the trading month at $12/MMBtu (delivered-ex ship) for October delivery, before gaining more than 14% and closing the month at $13.70/MMBtu. The sustained uptrend in prices has been swift, with spot LNG prices gaining more than 30% in value since the Platts JKM price bottom of $10.525/MMBtu on assessment date August 4 for September delivery. This was the lowest price in three years.
"There's a clear contango into the traditionally stronger winter season in northeast Asia, and this has brought some buyers back into the market to purchase October spot cargoes ahead of an anticipated rebound of prices in November," 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.
However, at $12.826/MMBtu, the October Platts JKM was still down 15.8% in year-over-year comparisons and was the lowest monthly average for the month of October since 2010.
"Moderate temperatures over the summer and lower-than-anticipated downstream energy demand – particularly in Japan and South Korea – have also kept buyers' inventories high, such that the appetite for cargoes amongst traditional northeast Asian buyers has remained quite weak," Wilson explained.
According to market sources, the strength of the rebound remains questionable, given excess incremental cargoes in the Asia-Pacific basin and an overhang of 10-17 cargoes from Korea Gas Corp.
The prices of competing fuels were down month over month. Thermal coal and fuel oil were down 0.5% and 1.4%, respectively, during the August 16 to September 15 assessment period.
| Platts Spot JKM and Substitute Fuel Prices (Monthly Averages)** |
|||||
| Oct-14 |
Oct-13 |
Sep-14 |
Year-On-Year |
Month-On-Month |
|
| JKM ($/MMBtu) |
12.826 |
15.235 |
10.702 |
-15.8 |
19.8 |
| Qinhuangdao coal ($/MMBtu) |
3.38 |
3.78 |
3.40 |
-10.7 |
-0.5 |
| 180 CST fuel oil ($/MMBtu) |
15.17 |
16.02 |
15.38 |
-5.3 |
-1.4 |
| Source: Platts
**Referred to as month-ahead, the figures in the table are monthly averages of daily values assessed by Platts from August 16th to September 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.
For more information on natural gas or the methodology used by Platts in its power assessments, visit the Platts website www.platts.com.
Platts' 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
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