LNG reaches 5-month high in Asia on strong electricity demand
Sizzling summer spurs A/C use in Japan, elsewhere
TOKYO -- The spot price of liquefied natural gas used in power generation has been rising in Asia as a hot summer fuels demand for air conditioning.
The price now hovers around $5.90 per million British thermal units, up around 8% from a month earlier and the highest since early March.
The price had been stuck around $5.50 since May, but started climbing moderately in late July.
In Japan, the world's largest importer of the gas, temperatures reached 35 C or higher in greater Tokyo and elsewhere on many days in July. Other parts of Northeast Asia have also been hot, causing people to crank up air conditioning units.
Even though more nuclear power plants are restarting in Japan, some power companies have stepped up LNG purchases in the spot market because usage is easy to adjust depending on demand.
South Korea and Taiwan are moving away from nuclear power, another factor boosting the market in Asia. Moon Jae-in, who became the president of South Korea in May, said in June the country will work to ease its reliance on nuclear power. Taiwan President Tsai Ing-wen is seeking to eliminate the use of nuclear power by 2025. Demand for LNG is seen growing further in the future.