By Nina Chestney
LONDON (Reuters) - Asian spot liquefied natural gas (LNG) prices dropped this week as large Chinese sell tenders signalled that supplies are well-stocked amid continued tepid Asian demand.
The average LNG price for March delivery into north-east Asia fell to around $23.00 per metric million British thermal units (mmBtu), down $9.60 or nearly 30% from the previous week, industry sources said.
China's Sinopec issued a tender on Wednesday to sell up to 45 cargoes this year. Under the tender, which closes today, Sinopec offered two to five cargoes each month between February and October on a delivered ex-ship basis.
China National Offshore Oil Company, or CNOOC, is also closing a tender today to sell liquefied natural gas cargoes for May through November deliveries, traders said.
A trader said the market would be watching how many cargoes will be sold as this could be an effort to bring down prices by sending bearish signals.
"Spot procurement activity from Asian buyers has been quiet for several weeks now, as many had procured cargoes earlier and subsequently experienced a warm winter," said Edmund Siau, lead analyst at consultancy FGE.
"Large sell tenders from Sinopec and CNOOC are further bearish signals for the LNG market, especially for Asian LNG demand in the summer. Asian buyers will be watching and waiting, to time the start of their summer procurement activity," he added.
According to Refinitiv Eikon data, China will experience mild temperatures over the next 10 days - 1-10 degrees Celsius warmer than normal - but there is a mixed picture for South Korea and Japan.
Meanwhile, Indonesia's government eased a coal export ban for 139 companies as of Thursday, a senior energy ministry official said, after the firms met local market sales requirements aimed at averting a supply crunch and power outages.
"Indonesia's dial down of its coal export ban imposed earlier in January likely took the teeth out of any upside risk to LNG prices," said senior gas markets analyst Kaushal Ramesh at consultancy Rystad Energy.
Europe continues to receive a high amount of LNG tankers, with the first ever LNG shipment from Indonesia arriving in Greece late last week.
The arrival of several LNG gas tankers into Europe has helped to ease prices but concerns over Russia-Ukraine tensions remain. [LNG/TKUK] [NG/GB]