China’s LNG import price falls for August on high inventory

16 July 2012 08:21  [Source: ICIS news]

SINGAPORE (ICIS)--China’s import liquefied natural gas (LNG) price has dropped for spot August cargoes because of high inventory levels in Asia, industry sources said on Monday.

The DES (delivered ex-ship) prices for August LNG into China were at $14.50/MMBtu (€12/MMBtu) in mid-July, down by $3.80/MMBtu from June, according to C1 Energy, an ICIS service in China.

Demand in China, South Korea and Japan has been weak since early June, when demand from gas-fired power plants in these countries was dampened by mild temperatures, a Japanese trader in China said.

China National Offshore Oil Corp (CNOOC), China’s biggest LNG importer, had to swap a term contract cargo supplied by France’s Total with South Korea’s KOGAS, as LNG stocks at CNOOC’s Putian terminal in Fujian province were too high, an industry source in Singapore said.

The cargo, due to arrive in Fujian in late July, was re-routed to South Korea in exchange for a cargo in early August, when stock levels are expected to decline, the source added.

LNG demand in the Asian spot market is expected to continue weakening until the end of August, as inventory levels are high and downstream demand is soft amid economic slowdowns, market sources said.

Demand is likely to rebound in September when regional buyers begin to restock, they added.

($1 = €0.82)

By: Ricki Wang
+65 6780 4359

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