A Japanese utility paid the least for spot liquefied natural gas in more than two years, potentially limiting the impact of electricity rate hikes that threaten to boost inflation.
Tohoku Electric Power Co. bought a shipment for late July at a rate just below $10 per million British thermal units on Thursday, according to traders with knowledge of the matter. That’s a third of the price it paid for a December cargo of the power-station fuel.
Global LNG prices are plummeting after a mild northern hemisphere winter left utilities with ample stockpiles, a reversal from last year’s energy shortage that triggered a record-breaking rally. Lackluster demand from China is also weighing on prices. Several Japanese utilities are so well supplied they are offering to resell spare shipments on the spot market, according to traders.
The lower cost for the power-station fuel may help partially offset the increase in regulated power tariffs, after they were allowed to rise by 14% to 42% earlier this week. That could offer some relief to policymakers battling a resurgence in consumer prices.
Tenders:
- Gail didn’t award a swap tender seeking to purchase an LNG cargo on a DES basis for June 10-14 delivery to the Hazira terminal in India
- Co. also didn’t sell an LNG cargo on an FOB basis offered from the Cove Point in the US for July 3 loading
- Gail expects to get four liquefied natural gas cargoes each in May and June from Germany’s SEFE Marketing and Trading, Chairman Sandeep Kumar Gupta said
Buy tenders:
--With assistance from Ruth Liao and Ann Koh.
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