Asian Winter LNG Purchase May Change The Global LNG Market
Asian Winter LNG Purchase May Change The Global LNG Market

Asian Winter LNG Purchase May Change The Global LNG Market

  • 25-Jul-2022 5:21 PM
  • Journalist: Motoki Sasaki

Asian LNG importers increased their import amounts mainly due to the rising fear that Russia will curb the supply and disrupt the already tightened global LNG market. The requirement for LNG rises as winter approaches in Asian countries, and most countries want to secure fuel to sustain the winter.

According to sources, While Japanese utilities are seeking supply starting in September, South Korea has ordered more than a dozen cargoes for delivery this winter. The dealers claimed that Taiwan's CPC Corp., which had been quiet for several months, had returned to the spot market to increase supply for this fall.

The boom in importing activities from Asian countries directly coincides with the maintenance end of the Nordstream pipeline, which is the largest LNG pipeline from Russia to Europe. But if any disruption occurs in this pipeline, it will put Europe in direct competition for procuring LNG with Asia, which is the highest importer of LNG.

Since the spot prices of LNG are traded at a high price this time of year, the Asian importers want to procure the shipments for the winter needs before the global LNG prices surge or a shortage of LNG induced by Russia.

European countries could attract more LNG supply than Asian countries because they were ready to pay more for LNG cargoes due to their dire need for supply to stock up their inventories. In the previous week, the price gap between Asia and Europe for LNG decreased, showing that utilities in the Asian Pacific region are paying more to increase LNG supply for the winter.

According to ChemAnalyst, the increase in imports from Asian countries will lead to rising LNG prices globally. China, the largest importer of LNG, has been absent from the Spot market of LNG due to demand dullness owing to various covid-19 restrictions. When China's economy picks up, it will impact the number of LNG cargoes reaching Europe.

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