Asian spot liquefied natural gas (LNG) prices rose slightly this week, guided by a host of factors, including recent South Korean buying and potential supply stockpiling to meet demand from Argentina. LNG for April delivery in Asia rose towards $4.55 per million British thermal units (mmBtu) in thin trade, versus $4.30 per mmBtu last week. May prices are seen trading at a $0.10 per mmBtu discount to April, reflecting weaker expected demand.
Traders were split on the scale and cause of April contract gains. Some pointed to South Korea's SK LNG Trading buying a higher-priced cargo for April delivery, which could not be confirmed. Others said the rise could also be explained by somewhat light gains in Brent crude oil prices week-on-week, as well as the possibility of traders hoarding cargoes until Argentina picks companies to supply 32 shipments to cover its winter demand.
Indian companies are also thought to have launched fresh tenders for supply covering periods including April and possibly beyond, two traders said. Bids and offers firmed from earlier this week, with bids currently in the low $4 per mmBtu, and offers in the high $4 per mmBtu. One trader said Egypt was still expected to tender for 2017-2018 LNG supplies this summer, although exact dates were still unknown. "People are closely monitoring the payment situation (in Egypt)," a third trader said, referring to the country's struggle to pay dollar-denominated imports resulting from an acute foreign currency crisis.
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