By Clyde Russell
LAUNCESTON, Australia- Asia continues to draw liquefied natural gas (LNG) from Europe with imports in July rising to the most in six months, even as spot prices stayed near seven-month highs.
The top-importing region is on track for arrivals of 24.85 million metric tons of the super-chilled fuel, up from 22.60 million in June and the highest since January’s 26.19 million, according to data compiled by commodity analysts Kpler.
In contrast, Europe’s imports are tracking at 6.56 million tons for July, the lowest since September 2021 and down from 7.21 million in June.
Europe’s LNG imports have declined every month since December, when they were 11.75 million tons, or almost double the level expected for July.
Much of the reason for the shift in global LNG flows can be attributed to Asia’s higher price, with spot cargoes for delivery to North Asia being assessed at $12.00 per million British thermal units (mmBtu) in the week to July 26.
This was down from the previous week’s $12.20 per mmBtu, but still close to the $12.60 for the week to June 21, which was the highest price since mid-December.
The benchmark Dutch contract ended at 32.60 euros per megawatt hour on July 26, which is equivalent to $10.30 per mmBtu, or a discount of 14.2 percent to the Asian spot price.
The Asian spot price is currently close to the sweet spot of being high enough to draw cargoes to the region, but not quite at levels to start crimping demand in price-sensitive buyers such as China and India.
China, the world’s biggest LNG buyer, is on track for imports of 6.41 million tons in July, up from 5.80 million in June and the highest since April, according to Kpler.
India, Asia’s fourth-biggest LNG importer, is forecast to see arrivals of 2.61 million tons in July, up from 2.60 million in June and the most since October 2020.
In some ways the ongoing strength in India’s LNG imports are surprising, as the South Asian country tends to cut back in the face of higher prices.
