Platts April LNG Japan Korea Marker finished the Asian trading week higher at $15.05/MMBtu, on the back of higher demand from North Asian utilities to increase end-winter inventory levels, and recent deals concluded over the week.
The April JKM started the week at $14.825/MMBtu February 20.
This week, more offers for April cargoes were heard between the low to mid $15/MMBtu level, according to sources, as concluded deals left dearer cargoes in the market.
Sources said recent deals done in the last week by Tokyo Electric, Kansai Electric, and Tokyo Gas removed several March and April cargoes from the market.
A trader said on Friday that several North Asian utilities were bidding at $15.00/MMBtu, adding some buyers were starting to look further out for May cargoes.
"The April market is still quite active, though some buyers are also starting to look for May volumes," the trader said, adding Kyushu Electric, Kansai Electric, Taiwan's CPC, and South Korea's SK E&S were still in the market for April cargoes.
A seller said there is still more Japanese demand, with more interest for April cargoes from across Asia this week, as companies based in South Korea, Taiwan and China were looking at entering the spot market.
The price gap between buyers and sellers for April shipments tightened by the end of the week, as recent warm weather in North Asia resulted in utilities revising down their energy consumption expectations.
A North Asian utility source said on Friday the weather in Japan was quite moderate, with the most recent weather forecast for Japan over the next month showing above average temperatures.
"The current prediction is that the weather will be warmer, so heating demand will be decreased, and our March consumption will be lower, which will mean we will have more inventory starting in April and May," the utility source said, adding that he did not know if these levels would be enough to avoid buying any cargoes in May.
The utility source said he would assess his demand for May in the next few weeks.
Another North Asian utility source said at the moment he does not have any intention to buy additional spot cargoes, adding most buyers in North Asia are not desperate to secure additional volumes.
Even at current levels, spot cargoes are cheaper than Japan Customs Cleared oil-linked, long- term contract cargoes for Asia, a trader said early in the week.
If power utilities in western Japan are unable to restart their nuclear reactors, other power companies may have to buy more LNG and sell electricity to them, the trader said. "Some utilities may still have room to utilize more gas."
Japan is expected to experience temperatures around the 30-year average over February 25-March 24, the weekly weather forecast released Friday by the Japan Meteorological Agency showed.
Tohoku and Chugoku on the main central island of Honshu, together with Kyushu and Shikoku, will have average or above average temperatures over the forecast period.
Hokkaido in the north and the southern islands of Okinawa and Amami are also expected to have an equal chance of seeing average or above-average temperatures.
Platts April DES West India was assessed at $13.20/MMBtu Friday, up 25 cents from Monday's start of $12.95/MMBtu, as prices firmed in North Asia.
A source close to India's Gail said the company had, "in the last week, secured a commissioning cargo for the Dabhol terminal."
The cargo is scheduled to arrive March 27, the source said, but was unable to provide further details.
Platts FOB Middle East was firmer at $12.50/MMBtu Friday, after starting the week at $12.25/MMBtu.
The Asia Pacific Day Rate fell to $130,000/day on increased availability of prompt ships, after starting the week at $135,000/day.
"There are quite a number of prompt ships currently available, so rates have dropped for spot requirements," a shipping source said.
Another source said there was less pressure on short-term availability, as a few vessels were available for short-term charters, "albeit with time constraints."
Another source said: "There are a few vessels available in the prompt position, around $130,000/day," adding that major LNG players like BG, Gazprom, and Excelerate might have excess shipping capacity right now.
