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Potential Downside to Spot LNG Prices on China Contracted Supply: CICC

LNG
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Contracted LNG sales prices set by China’s biggest state-owned suppliers set at $10/mmbtu could be a ceiling for spot purchases as key buyers have secured enough LNG contracts, according to a note from China International Capital Corp via Bloomberg.

  • The combined supply increase estimated at 11bcm from domestic output and 10bcm from Russia and Central Asia pipeline imports is set against demand growth estimated at 21.2bcm this year.
  • Extra LNG could only be required to boost stocks ahead of next winter, but high inventories could suppress global winter prices.
  • Interests from price-sensitive buyers in transport and industrial sectors could return if prices fell to $7-$8/mmbtu.
  • The global LNG market is forecast almost balanced this year with additional supply from Plaquemines LNG in mid-year and after the Freeport LNG resumption in mid-May.
  • EU winter gas storage targets could be reached as early as August.
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Contracted LNG sales prices set by China’s biggest state-owned suppliers set at $10/mmbtu could be a ceiling for spot purchases as key buyers have secured enough LNG contracts, according to a note from China International Capital Corp via Bloomberg.

  • The combined supply increase estimated at 11bcm from domestic output and 10bcm from Russia and Central Asia pipeline imports is set against demand growth estimated at 21.2bcm this year.
  • Extra LNG could only be required to boost stocks ahead of next winter, but high inventories could suppress global winter prices.
  • Interests from price-sensitive buyers in transport and industrial sectors could return if prices fell to $7-$8/mmbtu.
  • The global LNG market is forecast almost balanced this year with additional supply from Plaquemines LNG in mid-year and after the Freeport LNG resumption in mid-May.
  • EU winter gas storage targets could be reached as early as August.