PACIFIC LNG: Key market indicators for April 28-May 2

Platts JKM -- the benchmark price reflecting LNG delivered to Northeast Asia -- is expected to remain weak over April 28-May 2, amid sufficient supply following the opening of the arbitrage window the previous week.

Recovering production in the Asia-Pacific region is also weighing on the market.

Platts, part of S&P Global Commodity Insights, assessed the June JKM price down $1.07/MMBtu week over week at $11.129/MMBtu on April 25.

Meanwhile, the DES Northwest Europe Marker (NWE) was at $10.002/MMBtu on April 25, resulting in a JKM/NWE spread of $1.127/MMBtu, up 7.3 cents/MMBtu week over week.

Northeast Asia

• Asian spot LNG prices saw a downtrend in the week started April 21, with the JKM reaching a two-week low on April 25. The decline was attributed to inflows of US cargoes and recovering production in the Asia-Pacific region. Additionally, uncertainty in the global economy following US President Donald Trump's tariffs further weighed on the market.
• Malaysia LNG and Malaysia LNG Dua, subsidiaries of Petronas, have canceled four to five cargoes scheduled for April loadings due to a recent production disruption. However, the company has not canceled May and June cargoes and aims to normalize operations by the end of April, according to market sources.
• South Korea's Korea Midland Power Co. is seeking a 3.0-3.6-TBtu cargo for delivery on June 12 or June 23 to the Kogas terminal via a tender closing May 7. Meanwhile, Chinese buyers remain quiet in the spot market.
• China's trucked LNG prices held relatively steady compared with the decline in the JKM. Data from a platform affiliated with domestic gas distributor ENN Group showed that as of April 27, trucked LNG prices at China's 107 LNG receiving terminals and inland natural gas liquefaction plants averaged Yuan 4,716/mt, equivalent to $12.44/MMBtu, down 0.8% from April 21.
• Japan's LNG stocks held by major power utilities dropped 0.9% week over week to 2.11 million mt on April 20, the Ministry of Economy, Trade and Industry said April 23.
• In the week ended April 25, the physical Platts Market on Close assessment process recorded seven trades on a DES JKTC basis, with delivery in mid-June.

Southeast Asia

• Platts assessed the Southeast Asia Marker (SEAM) for May at $10.95/MMBtu on April 25, down $1.1/MMBtu week over week. The decline was attributed to subdued demand in the region, coupled with adequate supply in the broader market.
• The spread between JKM and SEAM widened 3 cents/MMBtu week over week to 17.9 cents/MMBtu on April 25.
• No tenders have been issued by Thai buyers since the Electricity Generating Authority of Thailand canceled its last tender on March 28 for an end-May cargo, indicating ample supply and sufficient alternative power sources during the peak heat season.
• In Vietnam, downstream demand has reportedly weakened due to the tariffs imposed by the US.
• Hai Linh was heard to have procured an LNG cargo for delivery in the second half of May, to be used for the commissioning of the Cai Mep LNG Terminal.

South Asia

• Platts assessed the West India Marker (WIM) for June at $10.80/MMBtu on April 25, down nearly $1.05/MMBtu week over week.
• Indian downstream demand remains muted, as the decline in prices of competitive fuels such as naphtha and fuel oil is steeper than that of LNG.
• Power demand in India increased in the week ended April 25, with gas consumption in the power sector averaging above 20 million standard cu m/day, according to sources.
• Bharat Petroleum Corp. Ltd. issued a tender for delivery over June 15-30 to Kochi. The tender closes April 28.
• Bangladesh awarded a cargo for delivery over June 12-13 to Vitol at $12.475/MMBtu, while state-owned Rupantarita Prakritik Gas Co. Ltd. issued a tender for delivery over May 22-23, June 5-6 and June 22-23.
• The JKM/WIM spread was at 32.9 cents/MMBtu on April 25.

Derivatives

• JKM balance-month next-day derivatives were assessed at $11.1/MMBtu, while JKM July derivatives were assessed at $11.22/MMBtu, reflecting a contango spread of 12 cents/MMBtu.
• Traders said the viability of arbitrage trades is "marginal," regardless of whether the arbitrage window from the US to Asia is open or closed, depending on each trader's shipping costs.
• The Platts-assessed East-West arbitrage for US-sourced cargoes to Asia via the Cape of Good Hope was stable in the week ended April 25, with the margin ranging from minus 41.7 cents/MMBtu to 27.3 cents/MMBtu.