China resumes spot LNG purchases to take advantage of price drop
[SINGAPORE] Chinese firms are purchasing liquefied natural gas (LNG) shipments from the spot market, a reversal of months of relative inactivity from the world's top buyer, after prices slumped to the lowest level in about a year.
At least two shipments were procured last week at the US$10 per million British thermal units level, according to traders with knowledge of the matter. More buying may materialise this week if prices remain in this range, the traders added.
The move is a u-turn for Chinese LNG buyers, which had reduced imports and resold shipments because expensive gas was not attractive to a weaker domestic market. China was the biggest LNG importer in 2024, but deliveries have slumped about 24 per cent from January to April compared to the same period last year.
Consistent purchases by China and others may help slow the recent decline in Asian and European gas prices. Spot benchmarks in both regions have fallen amid fears that the global trade war could result in an economic slowdown.
'Prices at the moment are weak,' FGE chairman Emeritus Fereidun Fesharaki said. 'By the end of this year, prices could go 50 to 60 per cent higher than they are today.'
Price sensitive Indian companies have upped procurement, traders added. Indian Oil Corp bought a cargo late last week for June delivery, and Gail is now seeking a shipment in a tender that closes this week, the traders said. BLOOMBERG
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