Latest News

Europe's October LNG imports show rare increase, Asia's dip: Russell

Europe's. imports of liquefied gas increased in October for the very first. month in 10 while those in Asia dropped for the very first time since. June, but not by enough to stop the combined total from. increasing.

The increase in Europe's imports and the decline in Asia's is a. turnaround of the recent trend, but the shift in October is not. enough to change the year-to-date image of a soft Europe and a. strong Asia.

The October numbers are more likely a sign that European. purchasers benefited from recent steady rates to top up natural. gas stocks ahead of winter season, while the small dip in Asia. was mainly due to leading purchaser China's imports slipping slightly.

Arrivals of the super-chilled fuel in Europe were 7.54. million metric lots in October, up from 6.37 million in. September and the most given that May, according to information compiled by. product experts Kpler.

However, the October overall was listed below the 9.47 million lots. from the same month in 2023, continuing a pattern of Europe. buying less LNG amid adequate inventories of natural gas ahead of. the northern winter season.

Asia's LNG imports were 24.36 million heaps in October, down. from 24.72 million in September and the most affordable given that July,. according to Kpler data.

However, Asia's arrivals in October were up 14.6% from the. same month in 2015, continuing the top-importing area's. pattern of purchasing more LNG this year.

For the first 10 months of the year Asia's LNG imports were. 239.77 million loads, up 10.3% from the exact same duration in 2023.

In contrast, Europe's LNG imports were 81.48 million tons. for the first 10 months of 2024, a drop of 20% from the exact same. period in 2015.

Even if Europe's imports do reveal the typical seasonal uptick. for winter season, it is still most likely that they will show a substantial. drop in 2024 from 2023.

This can partially be discussed by milder weather condition, but likewise by. a structural shift toward renewables for electrical power generation. and the shuttering of industrial plants that utilized gas as. fuel or feedstock.

However the decline in Europe's LNG imports so far this year has. been offset by the boost in Asia.

Combining the 2 regions sees overall imports of 321.23. million lots for the first 10 months of this year, up 0.6% from. the same duration in 2023.

CHINA TRUCKS

Much of the development in Asia's need has been led by China,. the world's biggest LNG importer, which has actually seen arrivals jump. by 13.4% in the very first 10 months of the year to 64.55 million. loads, versus the exact same period in 2023.

China has been using more LNG as sales of trucks powered by. the fuel surge, with the 108,862 vehicles sold in the first half. of 2024 being more than double the volume for the very same period. last year, according to data company CVWorld.

The shift to LNG trucks in China is partly driven by. aids and tighter emissions requirements, however also due to the fact that the. fuel has to do with 20% less expensive than diesel at current costs.

The boost in demand in China, and Asia more broadly, has. served to keep area LNG costs on a gently increasing trend for much. of 2024.

After reaching a post-winter low of $8.30 per million. British thermal systems (mmBtu) in late February, Asia's spot LNG. price << LNG-AS > has moved higher, peaking at $14.10 in mid-August. and moving sideways ever since, ending last week at $13.80.

The mostly stable costs reflect that LNG supply is. appropriate to satisfy Asia's increasing demand, with top global exporter. the United States meeting much of the increase.

Asia's imports from the United States rose from a 2024 low. of 1.51 million loads in February to a high of 3.43 million in. July, and have stayed high, coming in at 3.22 million in. October and 3.25 million in September.

Asia's LNG imports normally peak in December and January as. need increases for winter heating, and if the typical seasonal. pattern is repeated it is likely that volumes will show some. gains over the next few months.

But the danger is that the boost is modest, provided projections. for a milder than typical start to winter season, which will result in. lower intake at the start of the heating season.

The viewpoints revealed here are those of the author, a writer. .

(source: Reuters)