Japanese LNG Prices Firm

Spot LNG imports for Japan contracted in July 2018 increased to an average of $10/mn Btu, the ministry of economy, trade and industry (Meti) said August 9, up from $9.30/mn Btu in June and $8.20/mn Btu in May.

Continuing strong demand from China, where 1H2018 import volume increased by 50% year on year, is seen as underpinning Asian demand. The impact on the wider Asian market of Beijing's plans to impose a 25% tariff on US LNG imports, announced late last week but not yet implemented, remains to be seen.  Japanese 1H imports were down 2.7% but both South Korea and India registered double-digit increases.

The contract price recorded by Meti for spot LNG imports to Japan in July 2017 was a mere $5.60/mn Btu.  Meti's prices are ‘delivered ex ship’ in Japan, or else are converted into such a ‘DES’ equivalent.

Japan’s Meti also published July 11 official average arrivals-based prices each month for spot LNG cargoes. The latest figures show an even sharper increase to $10.30/mn Btu in July, from $8.90/mn Btu in June and $7.90/mn Btu in May.  These values are also far higher than year ago levels of $5.60/mn Btu in June and July 2017.