Prices of spot LNG for delivery to Asia averaged US$4.461 per mmBtu for June, according to the latest Platts Japan/Korea Marker data for month-ahead delivery.
At $4.461/mmBtu, the June JKM was 37.4 percent below prices for the same delivery month in 2015.
Platts added the marker was mixed over the course of the assessment period. After starting the period at $4/mmBtu on April 18, it steadily climbed to reach a peak of $4.75/mmBtu on April 28, before softening to $4.45/mmBtu by May 9.
“At such low price levels, offers to Asia started to become more influenced by European onshore gas markets,” said Max Gostelow of S&P Global Platts.
As valued at the U.K. National Balancing Point (NBP) hub, front-month natural gas futures averaged $4.181/mmBtu during the April 18-May 13 period, up 6.7 percent from the previous month’s average of $3.918/mmBtu, added Gostelow.
“This caused the JKM-NBP price spread to narrow to $0.35/mmBtu for the assessment period, down 5.5 percent from a month earlier,” he said.
At such a tight price spread, offers cargoes delivered to the Asia region tended to rise, also supported by U.K. NBP natural gas and stronger Brent crude oil prices, Gostelow said.
In the financial markets, Platts JKM swaps picked up activity in April, breaking the previous record amount of trading activity set just two months earlier in February. A record 1,295 lots of the JKM swaps changed hands and were cleared through Intercontinental Exchange (ICE) in April, the equivalent of more than four standard-size LNG cargoes, according to ICE data. April’s activity eclipsed the previous record by more than 56 percent.
The price of fuel oil, a possible competing fuel to LNG, decreased 44.7 percent year over year, while thermal coal was down 8.7 percent from the same month in 2015, Platts said.