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China Spot LNG Boosted in July with Rates Below Cost of Term Supply: ENN

LNG

Spot LNG interest from China has risen in recent months as it becomes more profitable to import shipments according to ENN Energy.

  • China’s spot LNG purchases in June-July may be boosted by spot rates below cost under oil-linked term supply contracts in July. In May the spot cargo delivered price fell 62% y/y and 11% m/m but was still slightly above cost of term supply.
  • The narrowing EU/Asia spread may encourage buyers to import cargoes under take-or-pay contracts rather than reselling them to EU.
  • ENN estimates China’s total gas demand jumped 12% y/y in May with trucked LNG volumes +28% y/y and piped gas +10% y/y.

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