South Korean LNG imports tumble 20% in first quarter
South Korea’s LNG imports plunged 20% in the first quarter of 2019, according to the country’s latest customs data, amid a mild winter and abundant gas stocks.
The world’s third largest importer of liquefied natural gas saw volumes decline to 10.37m tonnes in the first three months of the year, down 2.6m tonnes year on year.
Imports in March collapsed the most, dropping to 2.77m tonnes, down 35% relative to March 2018.
“The lower imports were attributable to warmer than normal weather during winter and high inventory levels in North Asia,” said Sanira Tennakoon, senior oil and gas consultant for AME Research in Sydney.
Tennakoon expected imports to increase towards mid-year, driven by higher demand in the region during summer months.
Spot price crash
South Korea’s customs data also showed South Korea effectively paid an average price of roughly USD 10.95/MMbtu for its LNG imports in March.
By comparison, spot prices plunged to just above USD 4.50/MMbtu by the end of the month on the region’s benchmark Japan/Korea Marker – some of their lowest levels in years.
The spot trade in LNG only accounted for roughly a quarter of the market last year, but its share is growing, according to data compiled by oil major Shell.
Temperatures in Seoul averaged 1C above their seasonal norm in March, according to timeanddate.com.
Forecaster Radiant Solutions sees mostly normal temperatures for Korea and Japan over the next two months.
Since 1 April, South Korea has slashed taxes on LNG and raised them on coal as part of the country’s efforts to curb air pollution.