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Bloomberg
Asia’s natural gas price plunged to a record low on concerns the spread of the deadly virus that has stricken China will hurt demand already weakened by an unusually mild winter.
The Platts Japan/Korea marker, a benchmark for liquefied natural gas (LNG), tumbled to $3.512 per million British thermal units, half the spot market rate in October when the heating season starts. Prices are falling as China braces for weaker economic growth due to the novel coronavirus outbreak that threatens energy demand and the country’s supply chain.
“Fears focus on the novel coronavirus’s impact on China’s industrial demand — much of which is still operating at very reduced capacity rates, but which contributes to 60-70%
of total LNG consumption in the world’s second-largest importer,†said Ciaran Roe, global director of LNG at S&P Global Platts.
China’s big state-owned LNG importers are considering force majeure declarations on contracted cargo deliveries. Firms resort to that option when they’re unable to meet contractual obligations for reason beyond their control.