Japanese average spot LNG prices drop by $7.40 per MMBtu in a year

Tuesday, 17 November 2015

The previous month's figures were $7.70 per MMBtu compared with $11.30 per MMBtu in September 2014, a year-on-year fall of $3.60 per MMBtu.


For cargoes contracted in October 2015 but not yet delivered the price given by the government was $7.60 per MMBtu compared with $12.40 per MMBtu in September 2014, a drop of $4.80 per MMBtu, less than the $5.80 per MMBtu fall in September 2015.

The LNG spot statistics are published by Japan's Ministry of the Economy, Trade and Industry and come mostly from the nation's utilities, the main users of the fuel.

Trading companies are excluded from the statistics. The next spot prices for November are due for release on December 9, 2015, provided a minimum of two trades are reported.

Japanese LNG spot prices and those in Asia in general have slumped along with oil since hitting $20 per million British thermal units in February 2014.

The Tokyo government published spot prices for the first time for delivered and free-on-board (FOB) cargoes in March 2014 when there was growing concern from the world's largest LNG user that it was paying too much for its cargoes on a spot basis.

Japan's overall LNG imports, including long-term contract deliveries, in September dropped by 5 percent, with shipments from the Middle East down even more by 20 percent.

Japan's September LNG imports amounted to 6.91 million tonnes compared with 7.27MT in September 2014, according to the Ministry of Finance.

The figures comprise mostly imports on long-term contracts linked to oil, though the proportion of spot cargoes is growing larger because of the lower prices.

The total cost of the LNG imports in September was about 34 percent lower at 416.1 billion yen ($3.4Bln) compared with 615.8Bln yen ($5.13Bln) in September 2014.

Prices per tonne of LNG for Japan has dropped from $706 per tonne in September 2014 to $502 per tonne last month at current dollar-yen exchange rates.

In million British thermal units, the prices are now at about $9.70 per MMBtu compared with $13.65 per MMBtu in September 2014.

Imports of LNG from the Middle East showed the largest decline in September compared with the same month a year ago.

Shipments from countries like Qatar, the United Arab Emirates and Oman dropped 20.4 percent to 1.71MT.

Asian imports in the month were also down. Shipments from nations such as Malaysia and Indonesia were 3.9 percent lower at 1.97MT.