Market Overview

Platts JKM™ for September-delivered LNG jumped 8.3% from month ago

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Year-over-year decline slowed year-low of 25.2%

SINGAPORE, Aug. 19, 2015 /PRNewswire/ -- Prices of spot liquefied natural gas (LNG) to northeast Asia averaged $8.007 per million British thermal units (/MMBtu) for September, according to latest Platts Japan/Korea Marker (Platts JKM™) data for month-ahead delivery.

The figure reflects the daily JKM assessment published by Platts, a leading global energy, petrochemicals and metals information provider and a premier source of benchmark price references, between July 16 and August 14, expressed as a monthly average.

At $8.007/MMBtu, the September monthly average price had reached its highest level since February 2015, when prices had averaged $9.911/MMBtu. Prices were largely supported by portfolio suppliers and traders still looking to optimize deliveries across the Atlantic and Asia Pacific basins, or backfill short positions for delivery in September. 

The marker had also posted its largest month-over-month gain of the year so far, rising 8.3% from August -- which had averaged $7.395/MMBtu -- as prices rallied from $7.825/MMBtu to $8.20/MMBtu by mid-month, on the back of this firmer buying interest.  

The bulk of spot deals were concluded between portfolio sellers and traders, with most looking to supply cargoes into numerous ongoing buy tenders in India and the Middle East.

"Emerging demand in the Atlantic basin provided some support to the JKM, while the narrow arbitrage between the JKM and UK onshore National Balancing Point NBP futures meant that suppliers remained keen to optimize their positions in both basins," said Stephanie Wilson, managing editor of Asia LNG at Platts. "However, demand from end-users in northeast Asia remained very slow and sentiment took a bearish turn once shorts were filled, more supply was announced and Brent crude oil values dipped again."

Prices trended down from the $8.20/MMBtu peak to $8.00/MMBtu by the close of the trading month as a result. This stimulated further demand from Indian importers, resulting in a spate of deals around the $8/MMBtu mark in the last trading week.  

This is the seventh consecutive month that JKM prices have been range bound between $7-8/MMBtu since declining from the $9-10/MMBtu level seen over January and February delivery.

Year over year, the JKM for September-delivery was down 25.2%, the slowest decline of 2015 so far, with September 2015 average prices at $10.702/MMBtu.

Meanwhile, the price of possible competing fuel thermal coal also decreased 18.0% year over year, while fuel oil was also down 52.2% from the same month in 2014.

Platts Spot JKM and Substitute Fuel Prices (Monthly Averages)*



Sep-15

Sep-14

Aug-15

Year-On-Year Change %

Month-On-Month Change %

JKM ($/MMBtu)

8.007

10.702

7.395

-25.2

8.3

Qinhuangdao coal ($/MMBtu)

2.79

3.40

2.85

-18.0

-2.1

180 CST fuel oil ($/MMBtu)

7.35

15.38

8.73

-52.2

-15.8

Note: UK and US front month futures roll at the end of each calendar month. JKM rolls on the 16th of each calendar month. 

Source: Platts data

The Platts JKM™ is an assessment of LNG prices for spot cargoes delivered to Japan and South Korea, based on the most recent trades and/or bids and offers from buyers and sellers in the open market prevailing at the close of the trading day. The monthly JKM assessments are month-ahead delivered prices and are an average of the daily JKM price assessments reported by Platts. The monthly reports on Asia LNG prices and market developments are typically published shortly after the 15th of each month.

About Platts: Founded in 1909, Platts is a leading global provider of energy, petrochemicals, metals and agriculture information and a premier source of benchmark prices for the physical and futures markets.  Platts' news, pricing, analytics, commentary and conferences help customers make better-informed trading and business decisions and help the markets operate with greater transparency and efficiency.  Customers in more than 150 countries benefit from Platts' coverage of the biofuels, carbon emissions, coal, electricity, oil, natural gas, metals, nuclear power, petrochemical, shipping and sugar markets.  A division of McGraw Hill Financial, Platts is based in London with more than 1000 employees in more than 15 offices worldwide. Additional information is available at http://www.platts.com.

About McGraw Hill Financial: McGraw Hill Financial (NYSE: MHFI) is a leading financial intelligence company providing the global capital and commodity markets with independent benchmarks, credit ratings, portfolio and enterprise risk solutions, and analytics. The Company's iconic brands include: Standard & Poor's Ratings Services, S&P Capital IQ, S&P Dow Jones Indices, Platts, CRISIL and J.D. Power. The Company has approximately 17,000 employees in 30 countries. Additional information is available at www.mhfi.com

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SOURCE Platts

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