Asian prices slip as China stays away amid lackluster demand

European countries have reported 100 percent gas storage levels. (AFP)
Updated 05 October 2019

Asian prices slip as China stays away amid lackluster demand

  • LNG prices have been at multi-year seasonal lows for much of the year despite increasing consumption as China’s demand growth stabilizes

LONDON: Asian spot prices for liquefied natural gas (LNG) slipped this week, with many Chinese and other regional players absent from the market due to the Golden Week holiday and no respite seen from rising supplies.

The average LNG price for November delivery into northeast Asia was estimated at $5.55 per million British thermal units (mmBtu), down from $5.75 per mmBtu last week.

There were few trades done in a quiet market due to the week-long vacation in China as well as a public holiday in South Korea, traders said.

On the Platts window, Shell sold a cargo to Vitol for delivery between Nov. 28 and Dec. 2 to Tianjin, China for $6.25 per mmBtu.

Several November cargoes were offered this week — by Abu Dhabi National Oil Co.  from its Das Island plant on a delivered-ex-ship basis and from the Ichthys LNG plant in Australia, sources said.

Angola also offered a cargo for end-October loading, one source said. On Friday, Kinder Morgan’s Elba Island plant in the US state of Georgia became the fourth to start up this year. US exports so far this year have equalled the 2018 total of the world’s No. 3 exporter, Malaysia.

In Europe, natural gas prices at the Dutch hub rose with the switch of the front month to the November contract but the outlook, in the absence of any sharp drop in temperature forecasts, was bleak.

Dutch front-month prices, a European benchmark, traded at around 16 euros per megawatt hour, or $5.15, compared to $3.51 at the end of September. That was far below the $9.38 they fetched at the same time a year ago.

European countries such as France, Austria and Poland reported gas storage 100 percent full with tanks across the continent 97.4 percent full on average, data from Gas Infrastructure Europe showed on Friday.

While consumption has begun to increase with the onset of colder weather, the continent remains well supplied. Fields in Norway and Britain are not expected to ramp up supplies this month by as much as they normally do, analysts said.

Turkey’s Botas bought four winter cargoes at a discount to the Dutch benchmark, said one source who interpreted the award of the tender at such a price as a sign the sellers did not want to add to the oversupply in Europe.

Egypt meanwhile lowered gas prices fixed for the cement, metals and ceramic industries by between $1.50 and $2.00 to $5.50 to $6.00 per mmBtu.

Despite the bearish outlook, European gas traders are keeping an eye on several issues that may curtail supplies or boost demand including concerns over some French nuclear reactors and a Russia-Ukraine transit agreement.

US sanctions on Chinese oil tankers meanwhile spilled over into LNG with a number of ice-classed LNG tankers, serving the Yamal facility in northern Russia, blacklisted due to their partial ownership by a sanctioned Chinese entity.

LNG shipping rates for the Pacific basin jumped to $75,000 per day, from $61,000-$65,000 last week. Sources said this was due to seasonal demand for tankers coupled with additional demand stemming from new projects coming onstream.


Lufthansa cabin crew union stages all-day strike at smaller airlines

Updated 20 October 2019

Lufthansa cabin crew union stages all-day strike at smaller airlines

  • There is escalating row over workers’ pay and pensions
  • The cabin crew union has for months fought with the airline in court over UFO’s legal status

FRANKFURT: German flight attendants’ union UFO on Sunday said it would stage an all-day strike at smaller German divisions of airline group Lufthansa in an escalating row over workers’ pay and pensions.
The walkout at Lufthansa brands Germanwings, Eurowings, Lufthansa City Line and Sunexpress had initially been scheduled for 0300-0900 GMT but the union in a statement on Sunday said industrial action would now be extended until midnight local time (2200 GMT), citing threats made by the airline over jobs as reason.
A Lufthansa spokesman said the strike was illegal because UFO’s status as a negotiator on behalf of staff was in doubt.
Lufthansa on Friday had offered a 2 percent pay rise to cabin staff, prompting the union to call off a planned strike at Lufthansa’s namesake core brand at hubs Frankfurt and Munich.
But the dispute deteriorated after UFO found the offer lacked concessions on expenses and employment conditions.
The cabin crew union has for months fought with the airline in court over UFO’s legal status. Lufthansa claims the union’s new leadership team that took office earlier this year was not elected in a way that met legal requirements.