Asia enters winter LNG demand season just as JKM hits four-year high amid uncertainties

Asia is entering the winter LNG season just as Platts JKM has hit its highest level since December 2022, amid price-swing factors such as uncertainty over the war in the Middle East, the EU’s ban on Russian LNG imports, and the impact of El Niño on weather.

Nevertheless, winter procurement by major Northeast Asian LNG buyers has gathered pace despite elevated spot prices, with a Chinese national oil company and a South Korean LNG importer securing cargoes as market expectations shifted away from the softer year-end conditions anticipated in September, according to market sources.

“Winter restocking by state-backed LNG importers in North Asia — mainly China, South Korea and Taiwan — has been key to bolstering the region’s winter balances and is one of the key reasons for pushing JKM to the $30/MMBtu level,” said Eric Yep, senior principal analyst for First Take Gas at S&P Global Energy CERA. “This is expected to continue at a reasonable level despite the broad assessment for a warmer-than-usual winter, as these countries will still require LNG for a normal cold season.”

“The winter procurement is also being driven by Europe stepping in to bolster its own winter stockpiles and higher demand in Europe’s seven largest gas markets on colder weather forecasts,” Yep said.

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