A breakneck rally in Asian natural gas spot prices is forcing some importers to halt plans to buy additional shipments of the power plant fuel.
Some Asian buyers are now unwilling or unable to procure LNG at current spot rates, instead choosing to wait for prices to come down before refilling inventories, according to traders. That risks leaving buyers short in the event of extreme weather or other major disruptions. Intensifying global competition for a dwindling amount of available LNG through the rest of the year threatens to drive prices higher and push up electricity bills. A pause in spot purchases from price-sensitive buyers in Asia, such as India, could provide some relief to the market.
Meanwhile, Pakistan released a tender to procure four LNG cargoes for July delivery to help ease a domestic fuel shortage and crippling blackouts. However, it isn’t clear whether the cash-strapped nation will be able to buy the shipments at these sky-high spot rates, traders said.