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LNG: Dec 17-21: DES Northeast Asia rebounds; demand increases and supply tightens

2018/12/24 07:00

--DES Northeast Asia
DES Northeast Asia prices rebounded last week. Looseness in supply/demand fundamentals eased as movements were seen from end-users from South Korea and European traders to buy spot cargoes. South Korea’s SK E&S was said to have bought a February delivery cargo. Steel producer POSCO also had bought a late January delivery cargo. And lastly, two European traders bought most of the surplus cargoes in the market for January delivery. In addition, Korea East-West Power Co (EWP) issued a buy tender for cargoes to be delivered for 15 years from 2024. Meanwhile, three companies, namely, Sakhalin Energy, Donggi Senoro LNG (DSLNG), and Malaysia’s state-run Petronas issued buy tenders. However, no looseness in supply/demand fundamentals was seen as some demand was observed.

 --FOB Middle East and DES South Asia & Middle East
Prices also rose in the FOB Middle East, DES South Asia & DES Middle East market. Although no DES-based demand was seen from the Middle East, loose supply/demand fundamentals for cargoes exported from the Middle East improved as demand increased in Northeast Asia and demand from South Asia remained strong. In South Asia, players from India bought prompt delivery cargoes. Reliance Industries (RIL), Indian Oil Co (IOC), Baharat Petroleum Co Ltd (BPCL), and Gail (India) Ltd bought December delivery cargoes. Among buyers, BPCL was believed to be buying a spot cargo for February delivery. ADNOC LNG from United Arab Emirates (UAE) was believed to have supply room, but no sell tenders were issued.

--FOB Atlantic/DES Europe/DES South America
FOB Atlantic and DES South America prices rose last week. Most of the cargoes produced in projects from the Atlantic basin were supplied to Europe and India. Meanwhile, one to two spot cargoes were believed to be not available in the market due to troubles at the 5.50mil mt/year Angola project in early December. On the other hand, demand was seen as CFE of Mexico issued a buy tender for a prompt cargo.

Tokyo : LNG Team  Y. Ota  +81-3-3552-2411
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