The LNG market sees dual positive factors, as supply risks overlap with increasing demand for cooling.
- The LNG Research Weekly Report indicates that last week, the price of July-delivered LNG in Northeast Asia rose by $0.60 to $18.20 per million British thermal units, supported by weather-driven power demand and renewed conflicts between the US-Israel and Iran, which have weakened expectations for resolving recent geopolitical tensions.
- Prices were further bolstered by the start of strike actions at the Ichthys plant in Australia (with annual production of 12 billion cubic meters, accounting for about 10% of the country's total LNG exports) by union workers. This makes it the third LNG plant in Australia to face strikes in the past three weeks.
- LNG inventories at Japanese power companies fell another 4% to 2.6 billion cubic meters, marking the lowest level for this period in two years. Spot demand in South Asia also remains robust, with importers in India, Pakistan, and Bangladesh actively procuring LNG.
- Looking ahead to this week, the outlook for the Northeast Asian LNG market is bullish as global LNG supply faces increased risks and cooling demand in the region continues to be strong. On June 8, the Offshore Alliance union in Australia announced plans to escalate strike action at the Ichthys plant, extending daily stoppages from four to eight hours due to stalled negotiations with the operator, thereby increasing the risk of a significant drop in shipments this week.
- In addition, feed gas inflow into LNG facilities along the US Gulf Coast is at a two-week low, Norway's Hammerfest plant has commenced a three-day planned maintenance, and one production line in Trinidad is entering a 50-day scheduled outage. The latest weather revisions continue to indicate a hotter summer than normal, so spot inquiries from Asian buyers are expected to persist, while ongoing Middle Eastern geopolitical conflicts will continue to inject volatility into gas prices.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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