TOKYO: Liquefied natural gas (LNG) spot prices for buyers in Japan fell for the fourth straight month in February, dropping more than a quarter to the lowest price since the survey began last March, trade ministry data showed on Tuesday.
Top importer Japan took in record LNG volumes in January, and gas imports in February are expected to have held close to those levels, but demand from other major buyers South Korea and China has disappointed, reflecting weak overall Asian demand.
Spot LNG contracted in February for delivery to Japan averaged $7.60 per million British thermal units (mmBtu), down from $10.20 per mmBtu a month earlier, the Ministry of Economy, Trade and Industry (METI) said.
Spot cargoes booked earlier and arriving last month averaged $10.70 per mmBtu, down 23 percent from $13.90 in January.
Asian spot liquefied natural gas prices LNG-AS for April delivery fell below $7 per mmBtu last month, trading at a discount to Europe’s benchmark UK gas hub prices, as ample stocks, a mild winter and slowing economic growth have dampened demand in parts of Asia.
Goldman Sachs forecast last week that Asian LNG prices would dip to $6.25 per mmBtu in the third quarter of 2015, before rising to $7.00 per mmBtu in 2016.
Tokyo started surveying spot LNG prices in March 2014 to add transparency to the market amid concerns about rising fuel costs in the wake of the shutdown of nuclear plants after the Fukushima crisis. The average spot price is based on around 10 percent of the nation’s purchases of the super-chilled fuel.
The trade ministry survey looks at samples of fixed prices for LNG sold to power companies and utilities among others, and excludes spot deals linked to benchmark prices such as the US natural gas Henry Hub index.
