Lower LNG Prices in Asia Failing to Spur Strong Demand Growth

Lower spot prices in Asia for LNG have yet to spur a significant demand rebound, although there is increased appetite from price elastic buyers in India and China, Reuters said.

• Asia’s LNG imports of LNG are seen at around 22.59m mt for March, down from 22.69m mt in April, according to Kpler.
• Imports in March are on track to be up 4.2% on the year, compared to the 4.6% on-year rise in February.
• Current spot prices at around $8.60/MMBtu are down around 41% year-on-year.
• India and China are seeing some higher discretionary buying. India’s imports are on track to rise 9.2% on the year in March to 2.01m mt, while China’s are up 10.3% to 5.99m mt.
• Given many long-term contracts are indexed against brent, this would put the LNG contract at today’s levels around 29% above spot prices.
• This is causing a drop in imports among markets which are mainly on termed volumes, such as Japan and South Korea.