--DES Northeast Asia

In the DES Northeast Asia market last week, prices fell from a week earlier. Front month delivery moved around $13.40-13.70. The Netherlands' TTF market tumbled on easing geopolitical risk. Buying interest from Japan and China remained weak.

In Japan, Kyushu Electric Power Co halted operation of the 700 MW No. 2 unit at the Reihoku coal thermal power plant on Aug 21 due to a suspected leakage of vapor in its boiler. Meanwhile, the maximum daily temperature has been rising to 36-37 degrees Celsius in Hiroshima and Hakata, increasing demand for air conditioning. As a result, the supply-demand balance in power suddenly tightened. On Aug 21, the Organization for Cross-regional Coordination of Transmission Operators, Japan (OCCTO) instructed Kansai Transmission ＆ Distribution and Chugoku Electric Power Transmission & Distribution Company to supply power to Kyushu Electric Power Transmission & Distribution. Under the circumstances, several market participants pointed out a possible increase in LNG demand from Kyushu Electric, Kansai Electric Power Co (KEPCO), and Chugoku Electric Power Co. The utility companies, however, have not shown a sign to procure LNG in the spot market as of now.

Spot demand from China was also tepid. A Chinese state-run company hinted that even if it moved to buy spot cargoes, buying ideas would be at $13.00 and below at most.

--FOB Middle East, DES South Asia and the Middle East

Iran has shown a cautious stance toward retaliation against Israel, causing a possible stop to the retaliation circles. An analyst said, "The Middle East situation might have entered a stage of calming down. Without support from Iran, Houthis, a pro-Iranian militant group in Yemen, cannot take a bold action, which may pave the way for the resume of shipments via the Suez Canal step by step."

--FOB Atlantic, DES Europe and South America

The European natural gas inventory data by Gas Infrastructure Europe (GIE) as of Aug 19 was 90.02% full to its full capacity, achieving the European Union's target (90% by Nov 1) about two months earlier. The Japanese company added, "Despite a persistent weak demand, markets were bought with just tensions in the Middle East and Ukraine. Without the tension recedes, the market tends to be sold."