战略与国际研究中心-Gas-Line,-Q2-2019_9页_1mb

LNG EDGE: Q1 2019 Trade Flow Report Summary

Core Content

The first quarter of 2019 marked a continuation of the bearish trend in the global LNG market, with spot prices falling below $5.00/MMBtu for the first time since 2016. This was driven by a strong increase in global LNG supply, which outpaced demand growth. The market also saw a shift in pricing dynamics, with a steady decline in spot prices across winter months rather than the traditional "rise and fall" pattern.

Key Market Trends

• Spot Prices Decline:

  • Spot LNG prices in East Asia plummeted from $8.950/MMBtu in January to $4.500/MMBtu in March, briefly reaching $4.275/MMBtu.
  • The UK NBP and Dutch TTF gas hubs saw spot prices fall below $5.00/MMBtu, impacting the competitiveness of LNG against pipeline gas.
  • Prices in Europe dropped to a level where long-term US LNG export contracts became unprofitable, but rebounded in early April to over $5.00/MMBtu, improving profitability.

• Supply Growth:

  • Global LNG exports increased by 14% year-on-year to 88.1 million tonnes.
  • Qatar remained the largest exporter, with 20.5 million tonnes in Q1 2019, up 6% from the previous quarter.
  • Russia saw the largest annual increase, adding 2.8 million tonnes due to the full operation of Yamal LNG's third train.
  • Australia added 2.2 million tonnes, with the Prelude floating LNG facility expected to begin exporting in Q2 2019.
  • US exports rose to 7.0 million tonnes, with the completion of Sabine Pass train five and Corpus Christi train one, though both facilities experienced outages in Q1 2019.

• Demand Shifts:

  • Europe became the main "sink" for excess supply, absorbing LNG cargoes that were difficult to sell elsewhere.
  • East Asia remained the largest import region, though its demand decreased by 4% year-on-year.
  • Japan saw a 2.3 million tonne drop in imports, attributed to milder weather and increased nuclear power generation.
  • China maintained strong growth, with a 25% increase in Q1 2019, though its demand slowed compared to the previous winter.
  • South Korea and Taiwan also saw declines, while India, Pakistan, and Bangladesh emerged as the third-largest import region, driven by new facilities and increased imports from these countries.

• Import Volumes:

  • France was the largest single importer in Europe, with 4.0 million tonnes.
  • UK and Italy saw significant increases in LNG imports.
  • Spain had limited growth due to its lack of pipeline connections to the main European hubs.
  • Middle East imports fell sharply, with Egypt increasing domestic production and Jordan cutting LNG imports.

Key Viewpoints

• The mild winter in both Asia and Europe reduced heating demand, contributing to the oversupply and lower prices.
• The East Asia Index (EAX) and UK NBP prices fell significantly compared to the same period in 2018, reflecting the market's shift toward surplus.
• US LNG export contracts became unprofitable as spot prices fell below the long-run cost of production.
• Prelude in Australia and new US liquefaction trains are expected to increase supply further in 2019, potentially leading to a prolonged surplus.
• The divergence between gas and oil prices is a key factor influencing LNG market dynamics, with gas prices falling below oil-linked contracts, creating pressure on importers to shift to spot markets.

Key Information

• Q1 2019 Global Exports: 88.1 million tonnes, up 14% year-on-year.
• Q1 2019 Global Imports: 88.7 million tonnes, up 11% year-on-year.
• New Supply Projects:
  • Australia's Prelude (3.6mtpa) expected to start exports in Q2 2019.
  • US liquefaction trains (Elba Island, Cameron T1-T3, Freeport T1-T2, Corpus Christi T2) are set to come online in Q2-Q4 2019, adding 34.7mtpa of capacity.
  • Russia's Yamal T4 (0.9mtpa) is expected to come online by the end of 2019.
• New Infrastructure:
  • India's new FSRU at Jaigarh and Bangladesh's second FSRU are set to increase import capacity.
  • Brazil and South Asia are also seeing increased LNG imports due to new infrastructure and reduced hydropower availability.

Outlook

• The market is expected to remain in surplus as new supply projects come online.
• European demand could be a key factor in stabilizing prices, especially with the potential shift to gas from coal.
• Asian demand may increase in summer due to higher air-conditioning usage, potentially lifting spot prices.
• Supply disruptions in early 2020, such as the expiry of the Russia-Ukraine gas transit agreement, could create new opportunities for traders.
• LNG Edge continues to provide real-time tracking, analytical tools, and market intelligence to support informed trading decisions.

Conclusion

The Q1 2019 LNG market was characterized by a surplus driven by strong supply growth, particularly from the US, Russia, and Australia. This led to a decline in spot prices, with Europe absorbing much of the excess supply and Asia seeing a shift in pricing dynamics. The market is now entering a new phase where traders must navigate the balance between supply growth and demand absorption, with key factors including weather patterns, infrastructure development, and the potential for price volatility in the coming months.