Japanese delivered spot LNG cargo prices drop $3.10 per MMBtu in year to highlight surplus

Wednesday, 10 April 2019
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Japanese spot liquefied natural gas cargoes arrived in Japan last month at a cost of $1.70 per million British thermal units less than the previous month and down $3.10 per MMBtu versus March 2018.

The delivered cargoes in March 2019 had cost an average of $7.10 per MMBtu versus $8.30 per MMBtu in February 2019 and $10.20 per MMBtu in March 2018.

Shipments contracted in March 2019 had an average price of $6.40 per MMBtu compared with $7.50 per MMBtu in February 2019 and $8.80 per MMBtu in March 2018, a year-on-year drop of $2.40 per MMBtu.

The North Sea Brent crude oil price that influences Japanese long-term contract prices also impacts spot LNG and other energy markets and the price was at around $65 per barrel or more in the first quarter of 2019.

The spot cargo numbers come from the commerce division of the Japanese Ministry of Economy, Trade and Industry and are only issued if a minimum number of two trades are recorded.

The Ministry emphasizes that “spot LNG” refers to fuel traded on a cargo-to-cargo basis and does not mean shipments under contracts on a short-term, medium-term or long-term basis.

The statistical accounting of the spot prices started in March 2014.

Overall Japanese LNG imports dropped 11.4 percent in February 2019 with only Middle East volumes holding up as more coal-fired power use and nuclear generation offset the need for gas-fired power as the cost of LNG shipments also increased.

Cargoes delivered to Japan in February 2019 amounted to 7.35 million tonnes compared with 8.29MT in February 2018.

The cost of the February 2019 cargoes came to 465.54 billion yen ($4.18Bln), a rise of 8.6 percent from the 428.72Bln yen ($3.85Bln) the cargoes cost in the same month a year ago.

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