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LNG: Possible Tighter Spot LNG if Colder Asia Winter as Forecast for Japan

LNG
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A colder-than-normal winter in Asia would raise demand for LNG as the region competes with Europe to secure enough supplies to cover winter heating demand. Demand for LNG spot cargoes from South Korea, the third-largest global importer, could increase due to depleted LNG inventories.

  • Asia is the premium market for US LNG until at least March 2025, according to BNEF today. For November delivery, profitability of US LNG exports to Asia is $9.49/mmbtu and to Europe is $8.54/mmbtu.
  • Japan Meteorological Agency forecast a 40% chance of colder-than-normal temperatures between Dec.-Feb. in the most populated regions with a 30% chance of normal temperatures, 30% chance of milder temperatures.
  • LNG inventories in South Korea should be enough to meet demand under normal weather conditions but not to cope with a freezing winter, according to BNEF. South Korea’s winter LNG demand is expected to grow by 10% y/y after the mild weather last winter while a cold winter could boost demand by 1.4m tons across October to March.  
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A colder-than-normal winter in Asia would raise demand for LNG as the region competes with Europe to secure enough supplies to cover winter heating demand. Demand for LNG spot cargoes from South Korea, the third-largest global importer, could increase due to depleted LNG inventories.

  • Asia is the premium market for US LNG until at least March 2025, according to BNEF today. For November delivery, profitability of US LNG exports to Asia is $9.49/mmbtu and to Europe is $8.54/mmbtu.
  • Japan Meteorological Agency forecast a 40% chance of colder-than-normal temperatures between Dec.-Feb. in the most populated regions with a 30% chance of normal temperatures, 30% chance of milder temperatures.
  • LNG inventories in South Korea should be enough to meet demand under normal weather conditions but not to cope with a freezing winter, according to BNEF. South Korea’s winter LNG demand is expected to grow by 10% y/y after the mild weather last winter while a cold winter could boost demand by 1.4m tons across October to March.