SINGAPORE (Reuters) - Asian spot liquefied natural gas (LNG) prices rose this week to their highest since February as buying interest from China remained firm and as supply is expected to be limited during maintenance in August.
Spot prices for July delivery in Asia were at $9.60 per million British thermal units (Btu) this week, gaining 40 cents from the previous week and are at the highest for this time of the year since 2014.
Higher oil prices had been deterring some buyers from snapping up cargoes in the spot market in recent weeks but some of them may now need to cover their requirements promptly, two trade sources said.
“Some traders are caught short in July,” one of the sources, based in Singapore, said.
While some companies are offering cargoes through private negotiations, supply of the super-chilled fuel is expected to be limited in August amid maintenance at Sakhalin Energy’s offshore gas platforms in Russia and at the Angola LNG project.
Indian buyers may be reluctant to buy spot cargoes at higher prices and could turn to using coal instead, a source familiar with the market said.
Demand from China remained firm with some willing to pay $9.70 to $9.80 per million Btu, a trader said. But details of the buyers’ purchase, if any, were not immediately clear.
South Koreans are also expected to step up their purchases to meet summer demand, two traders familiar with that market said.
Still, some spot supply from Russia and Argentina could keep prices in check, they added.
Russia’s Novatek has offered a cargo in the spot market at prices above the Platts Japan Korea Marker (JKM) price, a trader said.
Argentina’s Enarsa has offered eight cargoes for August and September and September in a tender that closes on June 12, while Angola LNG has offered a cargo for loading in mid-June, traders said.
Japan’s Inpex Corp said this week that it expects to start gas production from the wellhead for the Ichthys LNG project in Australia within a week or two following the final safety checks.
The company said first shipments of liquefied petroleum gas (LPG), condensate, an ultra-light form of crude oil, and LNG would begin by the end of September.
Reporting by Jessica Jaganathan in SINGAPORE; Editing by Christian Schmollinger