GLOBAL LNG-Asian spot prices stable amid muted demand, strong supply

By Marwa Rashad

LONDON, Sept 19 (Reuters) - Asian spot liquefied natural gas prices remained flat this week on high storage inventories and continued muted demand.

The average LNG price for November delivery into north-east Asia LNG-AS was at $11.50 per million British thermal units (mmBtu), unchanged from last week, industry sources estimated.

"Spot prices remained fairly rangebound over the last week, with no major changes to drive a new price trend," said Alex Froley, senior LNG analyst at ICIS.

"Traders may not want to sell too heavily ahead of winter, while they wait to see how cold the early months are and how well storage holds out. If the first couple of months prove mild, there could be more of a sell-off later," he added.

Storages in Asia are still relatively stocked and supplies are still healthy. Economic demand is still relatively low with the import tariffs discussion between China and the U.S. still not settled and with Chinese industrial production reporting moderate growth, said Klaas Dozeman, market analyst at Brainchild Commodity Intelligence.

Martin Senior, head of LNG pricing at Argus, said Indian buyers have sought at least five spot cargoes this week through tenders, but India's spot demand could fall next year when new short-term supply deals linked to U.S. price start.

In Europe, prices were largely flat on Friday morning against the backdrop of an expected fresh package of European Commission sanctions against Russia and extended Norwegian gas outages.

EU sources told Reuters on Friday the Commission will propose banning Russian LNG imports by January 1, 2027, a year earlier than planned, as part of a 19th package of sanctions against Moscow.

Meanwhile, Europe looks set to meet its storage targets ahead of winter and supply continues to build, in particular from the U.S. Plaquemines plant, which is now reaching close to its initially targeted 20 million metric tons per annum (mtpa) capacity, ICIS' Froley said.

Aly Blakeway, manager of Atlantic LNG at S&P Global Commodity Insights, said that planned maintenance at the U.S. Cove Point LNG project, and the Trans-Med pipeline between Algeria, Tunisia and Italy as well as limited growth in supply from Australia, Malaysia and Qatar were factors adding to the heightened winter risks.

S&P Global Commodity Insights assessed its daily North West Europe LNG Marker (NWM) price benchmark for cargoes delivered in November on an ex-ship (DES) basis at $10.954/mmBtu on September 18, a $0.595/mmBtu discount to the November futures price at the TTF hub.

Argus assessed the price at $11.00/mmBtu, while Spark Commodities assessed the October price at $10.832/mmBtu.

The U.S. arbitrage to north-east Asia via the Cape of Good Hope is strongly incentivising U.S. cargos to deliver to Europe, same as the arbitrage via Panama, said Spark Commodities analyst Qasim Afghan.

Global LNG freight rates in the Atlantic hit a five-month low at $26,500/day and Pacific rates fell for fourth week running at $28,750/day, he added.