OIL & GAS

Asian LNG prices edge up from record low but demand still stale

Asian spot liquefied natural gas (LNG) prices edged up this week from record lows in the previous week as Chinese buyers re-entered the market, but stale demand elsewhere capped the rise in prices.

The average LNG price for May delivery into northeast Asia rose by 10 cents to an estimated $2.40 per million British thermal units (mmBtu) this week, several traders said. Prices for cargoes delivered in June are estimated to be around $2.50 per mmBtu, they added.

Four LNG tankers carrying US LNG are on their way to China after Beijing started granting tax waivers to some importers, trade sources said.

This is the first time since March 2019 that shipments have resumed after a long-standing trade war in which China raised tariffs on LNG imports from the United States to 25 per cent last year.

Beijing has started granting tax waivers to LNG importers, three China-based sources familiar with the matter said, though details on the companies that have received exemptions on the tariffs were not clear.

Two of the sources said the tariff has dropped to zero, though a separate value-added tax of about 10 per cent still applies.

China’s Guangzhou Gas may have bought a cargo for delivery in June at about $2.40 per mmBtu, three traders said. This follows an earlier spot purchase by China’s ENN, they added.

“China’s demand is returning but whether it’s sustained will be the question, given demand everywhere else has dropped,” one of them said.

Source
ET Energy World
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