The global liquefied natural gas market is witnessing divergence in demand, as warmer temperatures in Asia boost demand while narrowing price spreads curb Europe's appetite for spot cargoes, Vortexa strategists said on Monday in a weekly LNG update.
Vortexa analysts said aggregate Asian arrivals reached 4.8 million metric tons across 75 cargoes, about 10% above the four-week average, supported by hotter weather and pre-summer inventory building.
Thailand recorded 500,000 mt, or seven cargoes, the highest in over a year, as heatwaves drove up demand for gas-fired power. India's receipts reached 600,000 mt, or nine cargoes, a 15% increase above the four-week average.
Meanwhile, in Northeast Asia, China imported 1 million mt, or 17 cargoes, about 5% above the four-week average. South Korea's inflows were significantly firm at 1 million mt, or 15 cargoes, 25% higher than the moving average. Japan, by contrast, received 800,000 mt, or 13 cargoes, 10% below its four-week average.
Vortexa analysts said the tightening Asian market has widened the price premium of Asian spot LNG over European benchmarks by 45% over the week, with the inter-basin differential averaging $2.2 per million British thermal units.
However, the spread between Northwest Europe LNG prices and the Dutch TTF benchmark has reduced the commercial incentive for spot cargoes.
Vortexa analysts said the margin no longer fully covers regasification and pipeline transport costs into the Netherlands, while a backwardated TTF curve discourages gas injection into storage.
European gas storage levels ended last week at 35%, 12 percentage points below the five-year average. Total LNG deliveries to the EU reached 2.2 million mt, or 38 cargoes, 7% below the four-week average.
France's imports fell 30% below average to 300,000 mt amid a planned outage at the 8 million mt-per-annum Montoir terminal. Italy, in contrast, recorded its highest LNG arrivals of the year at 500,000 mt, eight cargoes, supported by summer restocking and firm pricing dynamics in the domestic market.
Aggregate EU LNG send-out averaged 4,200 gigawatt-hours per day, about 5% below the four-week average, according to Vortexa data.
On the supply side, the first Qatari LNG carrier transited the Strait of Hormuz on May 9, since the outbreak of the conflict in February.
The 216,000 cubic meter Al Kharaitiyat completed an outbound passage after loading at Qatar's Ras Laffan terminal on May 1, and is bound for Pakistan.
Satellite imagery also showed a vessel loading at Das Island in the UAE, following a previously untracked inbound transit through the strait.
US LNG exports remained steady despite scheduled maintenance at the Cameron and Corpus Christi terminals. Total US volumes reached 2.5 million mt, or 36 cargoes, in line with the four-week average.