By Jessica Jaganathan
SINGAPORE (Reuters) - Prices of Asian spot liquefied natural gas (LNG) edged up this week as supply for cargoes to be delivered in April tightened, but traders expected prices to remain low for a while as demand continued to be weak amid the coronavirus outbreak.
The average LNG price for April delivery into northeast Asia is estimated at about $3.20 per million British thermal units (mmBtu), 20 cents higher from the previous week, but still near record low prices, several traders said.
Prices for cargoes delivered in May are estimated to be at the same level as April, they added.
"Supply for April has more or less dried up as U.S. cargoes are unable to make it to Asia," a Singapore-based trader said.
Low spot prices was also attracting buying interest from South Korean and Indian firms, traders added.
Still, market sentiment was bearish after PetroChina declared force majeure on natural gas imports including on piped gas and LNG, sources said this week.
PetroChina meets 40% of its total gas needs through imports and about 70% of imports are through piped gas from central Asia, Myanmar and Russia, while the rest are through LNG, one of the sources said.
"The supply cuts will fall on suppliers proportionately but LNG suppliers will have a lesser impact versus those on piped gas," said one of the sources with direct knowledge of the situation.
It was not immediately clear what volumes PetroChina had declared force majeure on or the time period the notice covers.
"China has been hit with a double whammy of industrial slowdown and also the end of the heating season, so this is going to bring the demand down for gas sharply," a trading source said.
Still, the low spot price attracted buying interest from South Korea and India, as well as a buyer in China.
China's Guangzhou Gas is seeking two cargoes for delivery over second-half of April and first half of May, while India's GSPC was seeking six cargoes for delivery over March to November through two separate tenders, sources said.
South Korea's POSCO bought a cargo at about $3.20 per mmBtu, industry sources said.
Meanwhile, price agency S&P Global Platts said on Thursday it had facilitated a first trade for the Japan-Korea-Marker (JKM) derivatives in its pricing process also known as market-on-close (MOC).
Commodities trader Trafigura bid for 5 lots of April JKM at $3.45 per MMBtu to which trader Vitol eventually sold, Ciaran Roe, head of LNG pricing at S&P Global Platts, told Reuters.
(Reporting by Jessica Jaganathan; Editing by Sherry Jacob-Phillips)