GNL MONDIAL

The spot price of liquefied natural gas (LNG) in Asia fell for the fourth consecutive week, driven by weaker demand and contained geopolitical risks as the ceasefire between the United States and Iran holds, despite some spot purchases by buyers from South Asia. The average price of LNG for delivery in June in Northeast Asia (LNG-AS) was estimated at $16.05 per million British thermal units (mmBtu), down from $17/mmBtu the previous week. President Trump expressed confidence in reaching an agreement to end the war in Iran soon and suggested a possible meeting with Iran over the weekend in Pakistan. Analysts believe that despite the ongoing discussions, restoring LNG supply in the Middle East may take longer than expected. Prices have been influenced by political developments, tweets regarding the ceasefire talks, and a sense of peace, rather than market fundamentals.

Although the ceasefire has reduced prices, no LNG laden ship has passed through the Strait of Hormuz. The drop in LNG prices prompted buyers from India and Bangladesh to secure rapid volumes after previous tenders were left unawarded. However, this demand has been insufficient to offset the general price weakness, especially as Northeast Asia remains largely sidelined due to the weak shoulder season and nuclear power plant restarts in Japan. In Europe, the reference price for LNG cargoes delivered in June to Northwest Europe was around $14.238/mmBtu as per S&P Global and other industry sources.

European buyers are increasingly relying on pipelines to balance short positions, optimize regasification capacity, and use hourly slots instead of aggressive competition for LNG cargoes. Meanwhile, investment funds have significantly reduced their exposure to term contracts for TTF gas in the last fifteen days, as the market struggles to reconcile record net long positions accumulated by speculative capital in March and the weakness of TTF prices.

Freight rates for LNG vessels have increased in the Atlantic and decreased in the Pacific, encouraging transboundary flows and reducing ship availability, significantly contributing to recent increases in Atlantic freight rates. The American arbitrage for the first month to Northeast Asia via the Cape of Good Hope continues to favor Asia, promoting cross-border flows and reducing ship availability, a major factor in the recent rise in Atlantic freight rates.