Indian LNG importers accelerate spot market purchases as prices dip

The purchases mark a turnaround after Indian buyers had earlier limited spot buying because offers were too expensive. | Photographer: Dwayne Senior/Bloomberg

India’s liquefied natural gas importers have accelerated purchases from the spot market, taking advantage of a recent dip in prices, as the country looks to ease a supply crunch triggered by the war in the Middle East.

Bharat Petroleum Corp., Gail India Ltd. and Gujarat State Petroleum Corp. bought shipments for delivery between April and June at below $16 per million British thermal units, according to traders with knowledge of the matter. The supplies were purchased in tenders that closed on April 15, said the traders, who asked not to be named because they’re not authorized to speak to media.

The purchases mark a turnaround after Indian buyers had earlier limited spot buying and canceled tenders because offers were too expensive.

The effective closure of the Strait of Hormuz, and attacks on the world’s largest LNG export plant in Qatar, have disrupted a fifth of the world’s supply of the super-chilled fuel. India is among the hardest-hit consumers, with LNG deliveries down 14% compared with the same time last year on a 30-day moving average, ship data shows.

The latest move comes after spot prices fell to the lowest level in over a month. Prices more than doubled after the war began, rising to roughly $25 per million Btu and forcing Indian buyers to curb purchases and reduce supplies to industrial customers. Still, prices remain about 50% higher than pre-war levels.

Indian Oil Corp. canceled a purchase tender that was scheduled to close on April 15, traders said.

More News:

• Argentina’s Enarsa received six offers for its buy tender for two May LNG cargoes
• Edison SpA said it has replaced most Qatari gas supplies disrupted by the war, and sees no immediate risk to serving its customers in Italy
• Japan sees a high probability of above-average temperatures across the country next month, according to Japan Meteorological Agency
  • Very high temperature warnings were issued on Thursday for April 22-30 for the Kanto-Koshin region

Drivers:

• European natural gas prices steadied, as traders focus on signs the US and Iran may extend a ceasefire and restart talks about ending the Middle East conflict
• US natural gas futures ended slightly higher as traders weighed expectations of another larger-than-normal injection into US storage against production levels falling to the lowest in months
• China’s 30-day moving average for LNG imports on April 15 was 112k tons, 33% lower than a year ago, according to ship-tracking data
• European gas-storage levels were ~30% full on April 14, compared with the five-year seasonal average of ~42%
• Europe’s 30-day moving average for LNG imports was 235k tons/day on April 15, 12% higher than the five-year seasonal average, according to ship-tracking data
• Estimated flows to all US export terminals were ~19.7 bcf/day on April 15, down 1.4% w/w: BNEF

Buy tender:

Company	Cargoes	Port	Delivery	Bids Due
PTT	1 DES cargo	Thailand	June	April 16

Vessel Rates:
Pacific spot earnings for a 174k cubic-meter vessel were at $71,000/day on Wednesday, down 0.7% from the previous session, according to data from Spark Commodities, based on assessments from LNG shipbrokers Atlantic earnings were at $98,000, up 0.8% the previous session NOTE: Spark values calculated on a round-trip basis, including hire, ballast bonus and lump-sum estimates

Prices:
Japan-Korea Marker futures on Nymex for May delivery -0.8% to $19.198/mmbtu on Wednesday June contract -3.5% to $15.780/mmbtu Dutch TTF futures for May delivery -4.2% to $14.359 on Wednesday June contract -4.2% to $14.335

 

–With assistance from Sing Yee Ong and Mary Hui.

Disclaimer: This report is auto generated from the Bloomberg news service. ThePrint holds no responsibility for its content.