Japan LNG Prices Hit Summer Low

The average price of spot LNG imported into Japan that was contracted in July 2017 fell to $5.60 per million Btu, said the country's Ministry of Economy Trade and Industry (Meti). That was also the average price quoted by Meti for spot cargoes arrivals in Japan during the months of June and July 2017.

Meti published its latest data August 9. They represent a downward change from a contract-based and arrival-based price of $5.70/mn Btu for May 2017 -- itself about three dollars lower than the peak this winter.

Meti quoted average prices in February 2017 for Japan's spot LNG imports of $8.50/mn Btu (contract-based) and $8.80/mn Btu (arrival-based).

Low seasonal prices in the summer (prices were broadly similar in summer 2016 too) look set to end, however, with industry price assessments indicating that spot cargoes for September 2017 delivery to Japan and northeast Asia are currently talked at about $6/mn Btu.

Japan's government is working to liberalise regional and global LNG trade; its competition regulator recently issued important new rules governing new long-term LNG contracts and guidance on the operation of existing ones.

Mark Smedley