- Lack of prompt spot LNG demand despite low LNG stocks
- Two power utilities seek spot LNG supplies for June onwards
- One utility seeks a strip of June-February 2023 LNG supplies
An official at the Ministry of Economy, Trade and Industry told that LNG stocks held by Japan’s major power utilities dipped a further 0.6% week on week to 1.65 million mt April 3, says an article published in S&P Global.
Low LNG stock
Despite the lower LNG stock level, Japanese power utilities are not seeking prompt spot LNG cargoes with the country entering the off-demand season amid high spot LNG prices, according to market sources.
The JKM for May delivery has been hovering in the $30-$39/MMBtu range since the roll on March 16. Platts JKM was assessed at $32.02/MMBtu on April 5 for May delivery, according to S&P Global Commodity Insights data.
This is still significantly higher compared to the assessment on April 5 in 2021, 2019, and 2018 at $7.088/MMBtu, $4.475/MMBtu, and $7.125/MMBtu, respectively.
At least two Japanese power utilities, however, are seeking spot LNG cargoes for June onwards, with one of the two utilities seeking a strip of multiple cargoes over June-February 2023, market sources said.
METI does not have directly comparable data for the same week of April 3 in 2021, but at the end of March 2021, stocks stood at 2.41 million mt, while the four-year average for end-March is 2.19 million mt, the data showed.
The LNG inventory stood at 2.01 million mt at the end of April 2021, with the four-year average for end-April at 1.90 million mt.
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Source: S&P Global