<LNG>
For this winter, how would supply/demand and prices for LNG change? In the futures market, the Title Transfer Facility (TTF) in the Netherlands were hovering above $12.40 for December to February contracts as of late July. However, Yutaka Shirakawa, gas analyst of International Energy Agency (IEA), forecast that the physical prices would be below these levels since new production projects in the US and Canada are operating smoothly.

On the demand side, buying interest was weak from Europe and China, which have had a great impact on the LNG market. In Europe, the target inventory filling volume was eased and stocks are smoothly built. In China, economic activities are slowing down due to a trade war with the US. Import volumes decreased 25% from the previous year and this level was anticipated to continue. "In case the market rise, geopolitical risks might be the biggest factor," said Mr Shirakawa.

Mr Shirakawa forecasts that the spot market on a DES Northeast Asia basis would not reach $13.00 this winter even if demand for heating increases amid cold weather. Other market players predicted the market to be below $12.00. However, traders having term sales contracts at prices linked to spot quotations on a DES Northeast Asia basis might move to buy in the paper market to prevent the market from softening.

<LPG>
LPG supply is forecast to increase both from the Middle East and the US this winter. Eight members of the OPEC Plus including Saudi Arabia, the United Arab Emirates (UAE) and Kuwait have gradually been reducing voluntary production cut volumes since April this year. Production is predicted to rise further in August, which would also raise LPG production.

In the US, major suppliers are planning to expand their export capacity. Energy Transfer in the US plans to expand its terminal in Nederland and its capacity to export LPG and ethane would grow in the third quarter of this year.

On the other hand, both the US and China reached an agreement in May to suspend additional tariff for 90 days and lower the tax rates. Even after the ceasefire of the US-China trade war, a 10% additional tax is imposed on products imported into the US and the future US tariff policy remains uncertain. This dampens buying interest in LPG from the US among Chinese players. For the second half of 2025, the relations between the US and China would be the key to see whether the increase in supply can be digested and whether supply/demand would be balanced.