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Spreads Encourage Spot LNG to Asia over Europe


European LNG net import flows were just below 440mcm/d on 29 May and roughly in line with the average seen during May with strong supplies assisted by muted demand in Asia. Strong imports continue to cover for the missing Norwegian imports during the current maintenance period, but weak European prices risk the diversion of spot cargoes to Asia.

  • At least two of China’s smaller LNG importers purchased summer delivery spot cargoes on Tuesday to take advantage of the lower prices according to Bloomberg sources.
  • Total LNG imports into NW Europe are expected to decrease month on month in May but are still expected just above March levels. A total of 87 cargoes had already unloaded in May according to Bloomberg yesterday with another six potentially arriving before the end of the month. A record 97 cargoes arrived in April after 86 in March.
  • Competition for LNG supply from Asia could increase with support from the higher JKM-TTF spread this week at around +1.4$/mmbtu today. The profitability of US LNG exports to Europe for July is estimated at 4.73$/mmbtu and to Asia at 5.80$/mmbtu according to Bloomberg.
    • TTF JUL 23 up 4.2% at 26.3€/MWh
    • NBP JUL 23 up 4.2% at 60p/th
    • JKM Jun 23 up 2.7% at 9.37$/mmbtu
    • JKM-TTF Jun 23 up 0.1$/mmbtu at 1.37$/mmbtu
    • US Natgas JUL 23 down -1.1% at 2.3$/mmbtu

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