China on LNG Buying Spree Amid Lower Prices

Chinese buyers ramped up LNG purchases since 9 January and purchased 6-8 cargoes, driven by a sharp decline in Asian LNG prices, according to market sources.

• China traded 6-8 cargoes for end-January to early-March delivery at $9.60-$10.60/MMBtu according to several sources.
• Platts assessed Jan. 9 February JKM at $9.809/MMBtu.
• The buyers were primarily national oil companies and second-tier buyers, while major portfolio traders were reportedly the sellers.
• During the physical Platts Market on Close assessment process Jan. 9, PetroChina bought from Shell a 3.2-3.4 Tbtu cargo for Feb. 10-12 DES JKTC at a flat price of $9.60/MMBtu.
• Glencore also a bought a cargo to Northeast Asia via the platform for 14-16 Feb delivery. The shipment was bought at $10.15/MMBtu from PetroChina on 10 January.
• The Chinese importer ENN has sold a cargo for February delivery to China, a trader with knowledge of the matter said.
• Jovo purchased an LNG cargo on a DES basis for January delivery to China, a trader said.
• "We made purchases primarily due to lower prices, given the ongoing weak fundamentals in downstream demand," said a Chinese buyer.
• "Importers who purchased cargoes under $10/MMBtu could evidently turn a profit by selling the LNG cargoes to downstream entities in China," an importer said.
• Market participants expect JKM spot prices to remain steady in the near term with buyers anticipating demand to recover by March when industrial consumption is picking up.
  • JKM Feb 24 down -11.7% at 10.74$/mmbtu
  • JKM-TTF Feb 24 up 0.1$/mmbtu at 1.05$/mmbtu