India's epidemic and Japanese restrictions suppress Asian LNG spot demand

According to a report from Singapore on April 27, 2021 by Natural Gas News, Asia’s liquefied natural gas (LNG) demand is affected by the worsening of the epidemic in India, which is expected to curb demand for natural gas and electricity.

Although the adverse impact of India and Japan on the LNG market will be offset by strong demand growth in other regions, spot LNG prices in Asia will remain above US$8 per million British thermal units.

Indian buyers usually account for 3 to 4 ships of LNG spot cargo per week.

LNG dealers said, “India’s demand for spot LNG has been completely exhausted.

A senior official of a state-owned natural gas company said: “As most industries have been affected by COVID-19, India’s domestic natural gas demand has dropped by at least 10% from normal levels.

According to dealers, the Indian state-owned Bharat Petroleum Company did not issue a tender on April 20 for the two batches of LNG deliveries in May and June.

An Indian end user said that due to the expected decline in downstream power and natural gas demand, recent purchases may be cancelled.

LNG dealers said that this week people were generally worried that terminal inventories would reach full capacity, or "top", but when they contacted terminal operators, they refused to confirm this trend.

　　An LNG supplier said that although local restrictions are not as strict as last year, the decline in spot demand may depress India's spot LNG prices and further expand the JKM-WIM LNG price gap.

　　Li Jun compiled from natural gas news

　　The original text is as follows:

　　India's pandemic, Japan's restrictions dampen Asia's spot LNG demand

　　Asia's LNG demand has been dampened by the worsening pandemic in India, that is expected to curb gas and power demand, with spot cargoes already impacted, and the declaration of emergency in Japan, where imports are already hovering near year-ago levels.

　　While the adverse impact of India and Japan on the LNG market will be offset by stronger growth in other regions, and spot Asian LNG prices remain supported at more than $8/MMBtu, downside risks have increased especially with the deteriorating situation in India.

　　Indian buyers typically account for three to four spot LNG cargoes per week, but spot demand has been curtailed since the start of April as lockdowns spread across several states, and end-users were unlikely to award previously issued tenders, or make spot purchases for deliveries in May and June.

　　"Demand for spot LNG cargoes has completely dried up.

　　A senior official at a state gas company said: "Domestic demand for gas is down by at least 10% from the usual levels since most of the sectors are feeling the impact of COVID-19.

　　State-run Bharat Petroleum Corp did not award an April 20 buy tender for two May and June deliveries, according to traders.

　　One Indian end-user, that typically buys one or two LNG cargoes a month, said it might cancel near-term purchases in anticipation of lower downstream power and gas demand.

　　LNG traders cited widespread concerns of terminal inventories reaching full capacity, or'tank-top', this week, but when contacted, terminal operators declined to confirm this trend.

　　While local restrictions are not as stringent as last year, the fall in spot demand could depress Indian spot LNG prices and widen the JKM-WIM LNG spread even further, according to an LNG supplier.
On April 26,It had assessed the JKM-WIM price differential at 40 cents/MMBtu.