The Global LNG Market in 2015: Q1 First Estimates and Outlook

In 2014, the LNG year was somehow a replica of the previous one as it was characterized by rising Asian demand, decreasing European demand and a high price differential between the two biggest LNG markets. In 2015, as the trade data of Q1 show, the dynamics are likely to be different. First data show that the pressure on the Asian market is falling due to lower demand and growing production in the Pacific basin. In addition, gross imports are increasing in Europe while the re-export business is collapsing. Elsewhere in the world, the LNG industry continues to develop, as new projects keep coming on stream.

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International Gas Prices – June 3 , 2015

NBP: a significant decrease

NBP and Coal priceThe average NBP price fell by 5.5% in May to €20.9/MWh ($6.8/MBtu). So far, the overall downtrend observed since mid-February has not been as steep as it was last year. In May 2014, the price average stood at €19/MWh ($7.6/MBtu), i.e. 10% lower than in May 2015.

Nor are forward markets anticipating a downtrend for the next few months as sharp as that occurring in 2014, with the NBP falling below €17/MWh ($6.8/MBtu) between June and August. The forecast is that prices will slip to €19.8/MWh ($6.6/MBtu) during the summer.

CEDIGAZ’s Monthly LNG Trade Bulletin of May 2015

This blog post analyses the main findings of the LNG Monthly Bulletin. The LNG Monthly Bulletin provides monthly traded volumes and prices by importer and country of origin, it is part of the LNG Service by Cedigaz.

Asian LNG market is easing

Asian LNG market is easingIn Asia, LNG purchases of the regional top-3 buyers (Japan, South Korea and China) decreased by 5.5% year-on-year in the first quarter of 2015. Imports fell from 42 million tons to 39.7 million tons, pulled by a 19% drop in South Korea (-2.4 million tons) where higher inventories and another mild winter pushed imports down. Lower demand for natural gas was highlighted by the drop in KOGAS’ domestic sales (-7.6%), mainly due to a fall in sales to the power sector (-14.3%).

In China, imports declined by 8.6% from 5.6 million tons to 5.1 million tons while in Japan, LNG purchases grew slightly from 23.7 million tons in Q1 2014 to 24.3 million tons in Q1 2015, even though mild temperatures cut total power demand.