Platts August LNG Japan Korea Marker ended the week at $14.95/MMBtu, down from Monday's start of $15.65/MMBtu, as trading activity for the period dried up despite the availability of cargoes via sell tenders.
"There is not much demand for August and September," a Tokyo-based trader said. "If we speak to big buyers they are not keen to buy unless the LNG is very, very cheap."
Meanwhile, the August spot cargoes still looking for a home failed to elicit any interest despite suppliers lowering their offers, a source at a North Asian utility said. The market was awaiting price direction to begin discussing September shipments, a Singapore-based trader said.
Australia's Woodside-operated Pluto LNG could have awarded its sell tender for one August 17-22 loading cargo to either Shell or BP early this week, a Tokyo-based trader said, adding that most buyers in the Far East had already secured their requirements for the period. Shell and BP officials were not available for comment.
The sailing time between Australia and Japan or South Korea is eight days, which works out to an arrival window of August 26-31 for the Pluto shipment.
Australia's Woodside-operated North West Shelf LNG closed its sell tender for three cargoes delivering in August, September and late October/early November early Tuesday but the outcome of the tender was not known by the end of Friday. The tender is valid for two weeks from Tuesday, sources variously said.
Woodside officials were not available for comment regarding the Pluto LNG and North West Shelf LNG tenders.
Another two cargoes that could be delivered to North Asia in August were sold by Nigeria LNG recently, with a July 9-10 loading shipment possible going to Japan's Kyushu Electric while a July 20-21 loading cargo could have been sold to a portfolio supplier, another Singapore-based trader said.
Kyushu Electric officials were not available for comment.
Spot August demand was just limited to Taiwan's CPC and South Korea's GS Caltex, the Singapore-based trader said. As Taiwan's CPC is thought to have a need for a late August/early September cargo, it could have participated in the North West Shelf tender, he added.
CPC did not take part in the North West Shelf tender as the company has no August or September spot LNG demand, a source from the company said Friday.
Dampening August demand further in north Asia was a spell of uncharacteristic cool weather after two typhoons in recent weeks.
Temperatures in Japan's capital city, Tokyo, averaged 20 degrees Celsius for most of the week, according to the Japan Meteorological Agency's web site.
This was below the 20-year average of 22.435 degrees Celsius from 1992-2011, according to data from the US National Aeronautics and Space Administration.
North Asia's summer typically begins in June and lasts until August or mid-September. LNG demand is cyclical and summer is one of the two peak buying periods in north Asia due to increased air conditioning use.
While buyers in north Asia could be looking to September, Indian importers could still take cargoes for July delivery, sources said.
Meanwhile, a source at an Indian importer said his company could buy an H2 July cargo if it could be clinched at less than $13/MMBtu. But this company was not interested in any August cargoes, the source said, as the monsoon season during the month boosts hydroelectricity supply, reducing the need for thermal power. Platts August DES West India lost 70 cents over the week, settling at $12.55/MMBtu Friday after starting the week at $13.25/MMBtu. Meanwhile, rates in the tight shipping market in Asia continued to rise.
Platts Asia Pacific Day Rate ended the week firmer at $145,000/d, up from $135,000/d Monday as the shipping market tightened further. Market sources agreed the rates were around $145,000, though a shipping broker said they could be slightly higher.
A European source said he expected the availability of modern LNG vessels to continue to remain tight until August, after which the market goes into the traditional September-October slow demand season.
