GLOBAL LNG-Asia spot price steady on ample stocks, tepid demand

By Emily Chow

SINGAPORE, Oct 31 (Reuters) - Asian spot liquefied natural gas prices held steady this week, amid tepid demand and healthy inventories in the region.

The average LNG price for December delivery into north-east Asia LNG-AS was $11.10 per million British thermal units (mmBtu), slightly down from $11.20/mmBtu last week, industry sources estimated.

While Asian LNG was supported by last week's stronger European prices, gains were capped by weaker Asian fundamentals this week, said Arturo Regalado, Kpler's senior LNG and natural gas analyst.

"We expect Asian LNG prices to hold steady next week, as weaker gas-fired utilisation and softer industrial gas demand in China, combined with above-average Japanese LNG inventories in December, cap upside," he said.

LNG stockpiles of major Japanese electric utilities were at 1.97 million tons for the week ended October 26, above the 1.84 million tons at October-end last year, the country's industry ministry data showed.

Additionally, supply expectations have been supported this week on the cool-down cargo declaration for the Golden Pass export terminal in the U.S., and Shell announcing the imminent start-up of second train at LNG Canada, said Martin Senior, head of LNG pricing at Argus.

In Europe, S&P Global Commodity Insights assessed its daily Northwest Europe LNG Marker price benchmark for cargoes delivered in December on an ex-ship basis at $10.126/mmBtu on October 30, a $0.53/mmBtu discount to the December price at the Dutch TTF hub.

Argus assessed the price at $10.165/mmBtu, while Spark Commodities assessed the November price at $9.907/mmBtu.

Ample pipeline and LNG supply kept prices in check, while warmer weather forecast and higher wind output kept a lid on gas-fired generation, said Kpler's Regalado.

Hedge funds and other institutional investors resumed selling off TTF futures last week, reinforcing the view that bullish sentiment has collapsed in the EU gas market, said independent gas analyst Seb Kennedy.

Meanwhile, the U.S. front-month arbitrage to Northeast Asia via the Cape of Good Hope is now closed and marginally pointing to Europe instead of Asia, but the arbitrage via Panama has remained open, said Spark Commodities analyst Qasim Afghan.

In LNG freight, rates in the Atlantic rose to a year-to-date high of $61,250/day, while Pacific rates also gained to $41,250/day, he added.