Spot gas prices in the first quarter of this year fell to more than half of the level seen in the same quarter last year on the back of the northern hemisphere’s mild weather and Europe’s reduced industrial consumption, according to the latest report from Independent Commodity Intelligence Services (ICIS).
ICIS said in its Q1 2024 Trade Flow Report that market fundamentals were sufficiently bearish to withstand any price impact from the closure of the Red Sea shipping route, which could have spurred a sharp upturn in prices in a tighter supply market.
As Europe’s gas storage levels remained high, the continent imported less gas, accounting for 28% of global volumes in the first quarter compared to 33% in the same quarter last year.
‘In turn, lower prices allowed Asian buyers to rebuild market share that had been lost over the preceding two years since the Russia-Ukraine war began,’ it said.
East Asian importers—China, Japan, South Korea, and Taiwan—maintained a stable market share of 52% of all LNG imports, unchanged from 2023.
The ICIS said that lower spot gas prices allowed South Asian buyers, including those from India, Pakistan and Bangladesh, to buy more. In parallel, in Southeast Asia, Thailand’s spot market was buoyant while Vietnam re-entered the market, having only ever imported one cargo before, back in July 2023.
On the production side, the Republic of the Congo exported its first ever LNG cargo to Italy.
The report forecasts that globally, a lot of new supply is not expected mid-year, although some new US projects could potentially deliver some first-commissioning cargoes by the end of the year, or early 2025, ahead of the ramp-up of a much larger wave of new production.
It was also said that although the market seems relatively comfortable and a mild winter in 2024/25 should not pose problems, the closure of the Red Sea to shipping and the ongoing Middle East conflict show there is always the potential for risk or unexpected events to alter conditions.
From January to March of this year, 107.3 million tonnes of LNG were exported worldwide, an increase of 4%, or 4.5 million tonnes, over the same period last year.
The US remained the biggest exporter, with Australia and Qatar in joint second place and Russia following up in third place.
