Platts April LNG Japan Korea Marker Ended The Asian Trading Week at $17.875/MMBtu

Platts April LNG Japan Korea Marker ended the Asian trading week at $17.875/MMBtu, down 32.5 cents/MMBtu, as North Asian spring demand subsided along with expectations of temperatures warming up in the period. 

The one-month weather forecast for March 2 through April 1 by the Japan Meteorological Agency showed that all of Japan's 12 regions are expected to experience average or above-average temperatures over the period. 

The April JKM started the week at $18.20/MMBtu. 

This marked the second straight week that the JKM declined. It slid a similar 32.5 cents/MMBtu in the week ending February 22 on lower demand. 

Statoil's Hammerfest LNG, the 4.2 million mt/year LNG export facility, which was expected to resume operations this week, experienced a leak as it was being restarted over the weekend and was once again promptly closed. 

It has been offline since late January, and it was unclear when operations would resume. But Hammerfest LNG's continued shutdown did little to tighten available supply which remained abundant. 

In addition, trade sources said that NLNG could resume normal operations by early March, or even next week, limiting any bullish impact on the spot market. LNG exports from the facility on Bonny Island were under force majeure since early February due to disruption of gas supplies from Shell. 

Sellers reduced offers further, with offers heard around $18/MMBtu by Friday, down from the mid-$18/MMBtu heard earlier in the week, as sellers competed for limited remaining North Asian demand for the period. 

April's demand picture was a contrast from March, with only Taiwan and Thailand seeking shipments for the month, together with spot requirements of around two to three cargoes from Japan. There was talk that Japan's Kyushu Electric secured an April-delivery cargo around $18/MMBtu last week. 

South Korea's Kogas and PetroChina retreated from the spot market after their high demand season in winter. 

In addition, Tokyo Electric Power Co. and Chubu Electric -- the largest and third-largest power utilities in Japan -- continued to show little interest for April. 

Taiwan could be seeking up to three cargoes for April and May deliveries, likely eying low spot prices. But that demand was not firm, as Taiwan has the option of going with Qatar's Rasgas, with whom it already has long-term contracts in place. 

Buyers have recently taken a step back from the market, not wanting to pay high prices for April, given that April is usually a shoulder month with lower demand and the possibility of shuffling requirements into May. 

But some traders said buyers were holding back, waiting for lower prices. 

"Some people are waiting for the right time to buy an April cargo," an Asian trader said. "So they may not tell the market that they have the demand right now. 

South America and Europe have not been very aggressive in seeking spot cargoes either, further dampening the mood in the market. 

Platts assessed February DES West India at $16.35/MMBtu Friday, down 15 cents/MMBtu from Monday's $16.50/MMBtu. 

A trade source noted that both GAIL and Petronet LNG were interested in April and May shipments, while another source added that Petronet might have already secured an April cargo in the $16s/MMBtu level this week. 

The Asia Pacific Day Rate fell from $120,000/day to $115,000/day, as chartering interest waned, in line with the bearish spot cargo market. 

Shipping sources said spot charters for modern vessels have been offered at $120,000/day or even lower. "Demand is softening," a shipbroker said.