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India's robust LNG imports are Asia's standout, however greater prices may weigh: Russell

Asia's imports of melted gas (LNG) are displaying contrasting characteristics in May, with strength in generally pricesensitive buyers like India, but a softer pattern in the established economies such as Japan and South Korea.

The top-importing continent is on track to receive about 23.61 million metric lots of the super-chilled fuel this month, according to information assembled by commodity experts Kpler.

This is up slightly from April's 23.23 million loads, although every day May's arrivals are a touch weaker, while they are more powerful than the 20.75 million from May 2023.

However while the total LNG import figures are relatively steady for Asia this month, the breakdown is rather at chances with recent movements in the area price.

India's May imports are estimated at 2.46 million heaps, up from 2.03 million in April and the greatest month considering that October 2020.

The rise in arrivals comes even as the area rate for delivery to North Asia << LNG-AS > has been rallying, rising from a. near three-year low of $8.30 per million British thermal units. ( mmBtu) in the week to Feb. 23 to a five-month high of $12.30. last week.

What deserves noting is that the cargoes arriving in India. in May would have been secured in a window from later February. to early April, a time when spot rates were increasing but were. still listed below the $10 per mmBtu level.

Now that the area cost has risen decisively above that. level, it raises the possibility that Indian utilities will. downsize purchases as LNG will no longer be competitive in the. domestic market.

There may be some early signs of this with Kpler tracking. 1.13 million tons of arrivals so far in June, over half of. that originating from the United States, suggesting those cargoes would. have been protected at costs before the recent rise.

Another South Asian purchaser with robust LNG imports is. Pakistan, with Kpler tracking arrivals of 730,000 loads in May,. which along with the exact same volume in January marks the strongest. outcome since June 2022.

Qatar is the major provider to both India and Pakistan and. it's likely that the South Asian nations had the ability to secure. competitive terms for area freights offered the Gulf manufacturer is. likely to have seen lower need from Europe in current months.

LNG vessels have been preventing the Red Sea and Suez Canal. since of attacks on shipping by Yemen's Iran-aligned Houthi. group, despite the fact that up until now no LNG carrier has actually been targeted.

This suggests Qatar's LNG deliveries to Europe have actually been. declining, dropping to 870,000 tons in May, the lowest since. August and below a recent peak of 1.23 million tons in. January.

But they may be recovering with Kpler tracking exports of. 1.02 million lots of LNG to Europe so far for June, and an. ongoing healing in volumes to Europe may cut those readily available at. discount rates to India and Pakistan.


In contrast to the strength in LNG imports in South Asia,. those in North Asia were softer in May.

China, the world's top purchaser, is on track to receive 5.96. million loads in May, below 6.47 million in April and the. least expensive regular monthly overall given that February, according to Kpler.

Nevertheless, China's imports are most likely to surpass the 5.80. million lots from May in 2015, continuing the pattern so far. this year of greater LNG arrivals amid a recovering economy and. constrained hydropower output.

Japan, the world's second-biggest LNG buyer, is expected to. import 4.83 million tons in May, below 5.36 million in. April, however greater than the 4.13 million from May in 2015.

Third-ranked South Korea is on track for May imports of 3.45. million loads, down from 3.99 million in April but greater than. the 3.19 million from May last year.

The general dynamic for the big three North Asian importers. is that arrivals are trending lower, in line with usual seasonal. relocations, however imports are higher on a yearly basis, which does. supply fundamental assistance for the higher area price.

Nevertheless, the recent spike higher in area prices may start to. weaken imports in South Asia from July onwards, in addition to in. China, where an increase above $10 per mmBtu makes it hard for. LNG to compete in the domestic market.

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