Platts: Monthly Spot LNG Prices for July Delivery Fell 9.5% on Low Demand
Fourth Consecutive Month of Price Decline in Platts Japan/Korea Marker
On a Year-Over-Year Basis, July LNG Prices Plunged 10.6%
SINGAPORE, June 17, 2014 /PRNewswire/ -- Prices of spot liquefied natural gas (LNG) for July delivery to Asia fell 9.5% to an average $12.951 per million British thermal units (/MMBtu) on a month-over-month basis, according to the latest Platts Japan/Korea Marker (JKM) for month-ahead delivery. The price decline is largely the result of high LNG inventories on the back of a warmer than average winter season. Today's data reflects the daily Platts JKM for July as assessed between May 16 and June 13 and expressed as a monthly average.
The Platts JKM for July was 10.6% lower than the July 2013 average of $14.485/MMBtu; the lowest monthly average since June 2011, when the average price dipped to $12.45/MMBtu.
This is the fourth consecutive month of price decline in the Platts JKM. Since it reached historic highs of $20.20/MMBtu for March delivery, as assessed on February 14, 2014, the marker has lost more than 40% of its value.
The price of LNG for July delivery started the month at $13.625/MMBtu before closing at $12.025/MMBtu, the lowest daily level since April 14, 2011, when the JKM for May delivery was assessed at $11.85/MMBtu.
"The startup of Exxon's Papua New Guinea LNG facility and its added supply has exerted significant downward price pressure on the market," said Stephanie Wilson, managing editor of Asia LNG at Platts, a leading global energy, petrochemicals and metals information provider and a premier source of benchmark price references. "Supply pressures are also resulting from additional tenders by Asia-Pacific liquefaction projects as buyers take less volume via term contracts."
Weather and second-half plans are exerting their own pressures to prices, said Wilson. As Platts has reported, state-owned Korea Gas is seeking to place time swaps for upwards of 20 cargoes in the second half of the year, which will likely keep downward pressure on prices. Also, temperatures in northeast Asia have been moderate during the start of the summer air-conditioning season, which means electricity use has not yet demanded the need for additional spot cargoes of LNG.
The price of competing fuel, thermal coal, was lower by 6.8% on a month-over-month basis, while fuel oil was up by 0.2% during the May 15 to June 13 assessment period.
| Platts Spot JKM and Substitute Fuel Prices (Monthly Averages)* |
||||||
| Jul-14 |
Jul-13 |
Jun-14 |
Year-Over-Year |
Month-Over-Month |
||
| JKM ($/MMBtu) |
12.951 |
14.485 |
14.316 |
-10.6 |
-9.5 |
|
| Qinhuangdao coal ($/MMBtu) |
3.76 |
4.03 |
3.79 |
-6.8 |
-0.7 |
|
| 180 CST fuel oil ($/MMBtu) |
15.77 |
15.73 |
15.40 |
0.2 |
2.4 |
|
| Source: Platts
*Referred to as month-ahead, the figures in the table are monthly averages of daily values |
||||||
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.
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 approximately 900 employees in more than 15 offices worldwide. Additional information is available at http://www.platts.com.
About McGraw Hill Financial: McGraw Hill Financial (NYSE: MHFI), 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, J.D. Power and McGraw Hill Construction. The Company has approximately 17,000 employees in 29 countries. Additional information is available at www.mhfi.com.
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SOURCE Platts
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