The Platts JKM for November delivery fell 5 cents/MMBtu over the course of the Asian trading week, closing at $14.30/MMBtu Friday, as spare November availability put pressure on the November and December markets.
The number of unsold cargoes available for the November period weighed on sentiment, prompting sellers to lower offers for November. The effects of the prompt spare availability also spilled over into December, where offers were also heard lower.
H2 November offers were heard available around $14.50/MMBtu from the high-$14s/MMBtu, while offers for December fell from levels around $16/MMBtu to the mid- to high-$15s/MMBtu by Friday.
There was also news that at least one late October cargo, heard to be of Indonesian origin, was still available around the low-$14s/MMBtu, which further fueled bearish sentiment on the prompt.
However, it was unclear at this point whether the Indonesian government would give the necessary approvals needed to lift the cargoes from Bontang LNG, as only a few approvals were heard granted in September, but only in order to avoid a tank top situation.
Most of the deals happening right now for November were either being done by opportunistic buyers from China or India, or traders or portfolio players looking to either optimize or fill a short position.
Other end-user demand throughout most of Asia was weak. Japanese utilities widely reported weak demand through November on the back of higher inventory levels and lower end user demand.
South Korea's Kogas expected to have real demand only from December or January, while Taiwan was heard to have little spot demand following the startup of its contract with the recently commissioned Papua New Guinea liquefaction plant.
The ExxonMobil-led Papua New Guinea LNG facility will start supplying term cargoes to its long-term buyers in Japan and Taiwan in October or November this year, but has extra capacity that it has recently been tendering out to the spot market.
PNG LNG was heard this week to have re-tendered its H2 November cargo that had gone unawarded in its last tender, which had closed on September 26.
The initial tender, for one H1 November-loading and one H2 November-loading cargo, was heard partially awarded, with the early November cargo heard bought by PetroChina in the mid-$14s/MMBtu.
The cargo would deliver into China in the middle of the month.
The new tender announced by PNG was for a total of two cargoes; in addition to the earlier H2 November-loading cargo, a H1 December cargo was tendered on a DES basis. The latest tender is slated to close October 14.
In other tender news, the latest sell tender from Australia's North West Shelf LNG project was heard awarded.
Two cargoes had been sold to a Europe-based seller and a trader, according to initial reports, with several sources pegging the prices at around the $14/MMBtu mark and both cargoes awarded on an FOB basis loading in early November.
Further out, December trading kicked off, with a smaller Japanese utility heard to have transacted for at least one cargo in H2 December around the mid-$15s/MMBtu level, but this could not be confirmed.
Traders maintained that Japanese utilities were still showing between 4-6 cargo requirements for the month, while buyers in China were likely to wade back into the market for December in the coming weeks.
However, with inventories at both power utilities and city gas companies in Japan well above average for the time of year, buyers currently have very flexible delivery windows, affording them the option of taking to the sidelines in anticipation of better prices to come.
