As European benchmarks increase, Asian LNG soars to its highest level this year

Due to heightened competition from Europe for the fuel used in power plants and heating systems, spot LNG prices in North Asia surged to their highest level of the year. According to traders, the Japan-Korea marker, which serves as the region’s benchmark, increased to roughly US$15.3 per million British thermal units on Thursday, November 21, the highest level since early December 2023. This comes after the European benchmark saw a comparable increase.

With some traders shifting supplies away from Asia, the unusually cold and windless weather in Europe is depleting gas stocks and increasing demand for seaborne LNG cargoes. Some purchasers in Asia, like those in India and China, are reducing spot LNG purchases because shipments are too costly and other fuels are more enticing. According to traders, it still makes more financial sense for US cargoes to prioritize Europe, even with the increase in LNG prices in Asia. Weekly LNG deliveries to Europe are expected to hit the highest level since February next week, according to ship-tracking data compiled by Kpler.

According to traders, China, the largest importer of LNG worldwide, does not urgently want more supplies due to overstocked areas of the nation. They noted that unless the winter weather drastically cools down, the nation probably won’t get back into the spot market.