Asian LNG prices rise to highs in more than two years due to heating demand

According to a report from Rio de Janeiro/Singapore on December 12 by EnergyWorld.com, according to trade sources, Asian liquefied natural gas (LNG) spot prices rose to the highest level since September 2018 this week due to strong heating demand, tight supply and rising freight rates .

According to sources, the average price of liquefied natural gas delivered to Northeast Asia in January was approximately US$11.10 per million British thermal units, an increase of US$3.00 from the previous week. The price for delivery in February is estimated to be approximately $10.50 per million British thermal units.

Weather data from Refinitiv Eikon shows that in the next two weeks, temperatures in Beijing, Tokyo and Seoul are expected to be below average, which will increase the demand for natural gas for heating.

According to sources, with the economic recovery, China’s increase in imports and lack of transportation capacity have also pushed up prices.

A trader in London said: “China’s LNG imports hit a one-year high in November and will increase further, thereby pushing up demand.”

According to sources, Pakistan LNG recently tendered six batches of January spot goods, but only half of the demand was met, which shows how tight the supply situation is.

Two of the world’s four major natural gas exporters, production problems in Australia and Malaysia, and delays in the Panama Canal through which the United States transports some LNG through the canal, have exacerbated supply tensions.

According to traders, as US natural gas production hits a new high, natural gas prices are expected to stabilize in the second half of January next year. The current US natural gas price is below US$3, which makes exports profitable.

Since June, the price of LNG in Asia has risen more than five times. At that time, due to the decline in demand due to the new crown epidemic, the price of LNG in Asia fell below US$2.00 per million British heat.