The prices of Liquified Natural Gas (LNG) in Asia reached to seasonal record levels amid strong regional demand and surging European gas prices. After conclusion of the last week, LNG delivered to Northeast Asia crossed USD 16/MMBtu which is highest in the last 8 years.

The regional demand in Asia remained high due to strong demand from India which witnessed Petronet LNG and Indian Oil Corp closing tenders for two cargoes in the upwards of $15/MMBtu for August and September and to be delivered to Dahej.

The sectors driving India’s LNG imports are fertilizers and bulk chemicals both maintaining strong consumption levels of LNG. Another reason for strong regional demand is the rising intake from China which has experienced the halting of spot selling activity from multiple Chinese companies as demand picked up in China and ex-terminal trucked LNG prices rose sharply. Surge in power consumption in Japan and South Korea also supports the bullish sentiment for LNG in Asia.

As per ChemAnalyst, “prices of LNG are expected to remain high due to surging European Gas Prices which are strongly related to the rising coal and carbon prices. The prices of coal and carbon are unlikely to fall in the short term due to high mining and energy costs related to coal and carbon mining.”