Asian LNG eases on South Korean stockbuild and softer Chinese industrial demand

Market & trading calls

European TTF front-month price outlook: Stable as increased LNG imports and limited Asian competition are expected to weigh on prices, while reduced Norwegian pipeline flows from ongoing maintenance and potential upside in gas-fired generation provide support. Downside risks stem from further Arctic LNG 2 deliveries into China.

Asian LNG front-month price outlook: Slightly bearish with prices likely to extend losses as end-August inventories remain high in South Korea and China. Pacific supply is steady, while weak Chinese industrial activity and soft LNG truck sales continue to weigh on demand.

Asian LNG – TTF spread outlook: Slightly narrower as stable TTF contrasts with further downside risk in Asian LNG. The spread held virtually unchanged from last week at $0.26/MMBtu on 3 September.  

US Henry Hub front-month price outlook: Steady as bullish momentum from short-term reductions in production is offset by weak power demand and expectations of consecutive bearish storage builds.

Key natural gas and LNG front-month prices ($/MMBtu)

Source: ICE, NYMEX, Spark Commodities. Brent-indexed price represents 12% slope of 90-day moving average of Brent contract. Netforward USGC to NWE calculation is 115% Henry Hub contract plus shipping and regasification costs into Gate (Spark Commodities).

Asian LNG-TTF front-month spread ($/MMBtu)

Source: ICE, Kpler Insight

Atlantic basin LNG front-month arbs ($/MMBtu)

Source: Spark Commodities, incorporating ICE-listed Spark Freight and Spark Cargo products. For a full M+12 forward curve and netback cost breakdown, contact Spark at info@sparkcommodities.com.

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