--DES Northeast Asia

Although South Korean major steel manufacturer POSCO bought a cargo for first-half September delivery at $11.80-11.90 through its DES buy tender closed on Monday, spot demand from Japanese and Chinese end-users were limited for prompt delivery. An industry source said, "Spot cargoes are overpriced compared with term contract cargoes, and many buyers are reluctant to seek spot cargoes. The unwillingness to seek spot cargoes came as Brent crude prices, the benchmark that term contracts are linked to, are left undervalued while DES Northeast Asia spot quotations for LNG remained solid. Under the circumstances, many end-users boosted the intake of term contract cargoes by exercising UQT (Upward Quantity Tolerance) as one option, in a bid to satisfy summer demand. One player said, "The 8.9 mil mt/year Ichthys project in Australia received more orders from term contractors and found it difficult to supply any cargoes on a spot basis. But the project was scheduled to undergo regular maintenance for about two months starting Aug 18. The above player noted, "The maintenance would be another cargo for Ichthys to skip spot sales."

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

State-run Indian Oil Corp (IOC) purchased one cargo for Aug 20-30 or Sep 2-7 delivery in a tender closed on Aug 5. The price was at $11.80-11.90. IOC was previously looking to buy one cargo for late-August delivery in a tender closed on Jul 29, but the tender was unawarded. A source at a Japanese enterprise said, "IOC was so desperate to secure the supply for this timing. Apart from this prompt-delivery cargo, the DES South Asia market's fair value for second-half September delivery apparently underperformed the DES Northeast Asia market by about 25cts.

--FOB Atlantic, DES Europe and South America

Angola LNG on Jul 30 closed a sell tender on a DES basis, but the tender was heard unawarded and cancelled eventually. The tender offered one cargo for late-August to mid-September delivery out of the 5.2 mil mt/year Angola project. Some players cited a possibility that the withdrawn tender could have been another tender for August-September that was closed on Aug 6.