LNG stocks at Japan's power utilities rise to highest on record

LNG stocks held by Japan's major power utilities rose to the highest level on record as of Aug. 28 as domestic utilities faced weaker-than-anticipated power demand amid cooler temperatures.

The LNG inventory advanced for the seventh straight week, rising 6.9% on the week to 2.63 million mt as of Aug. 28, the Ministry of Economy, Trade and Industry said Aug. 31.

It was the biggest week-on-week percentage rise since July 24, when LNG stocks jumped 15.4% on the week to 2.25 million mt.

METI does not have comparable Aug. 28 data for the previous year. However, at end-August 2021, inventory stood at 2.43 million mt, while the average over fiscal year 2017-18 (April-March) to FY 2021-22 for end-August was at 1.85 million mt.

Highest on record

The Aug. 28 LNG stocks were the highest on record since METI started releasing weekly inventory in January 2021, said a METI source, adding that the end of August stocks will be the highest since the ministry started tracking the end-month stock data in fiscal year 2017-18 (April-March).

The Japanese power utilities' LNG stocks got a boost from easing power demand in the light of cooler temperatures in the Tokyo and Chubu areas, the METI source said.

The LNG inventory built comes at a time when JERA is seeking to sell a prompt delivery LNG cargo bilaterally in the week of Aug. 29 in the face of high inventory, several market sources told S&P Global Commodity Insights.

Spot prices

The Platts JKM for the first-half of October was assessed at $55.462/MMBtu, while the second-half of October was assessed at $56.279/MMBtu on Aug. 30, S&P Global data showed.

Platts had assessed H1 October at $58.89/MMBtu, while H2 October was assessed at $59.199/MMBtu on Aug. 23, as per S&P Global data.

Spot LNG prices have eased due to limited buying interest for September and October delivery, a