THE PRICE DYNAMICS IN JAPANESE AND EUROPEAN LNG MARKETS

摘要

Although the same product is being delivered to the same destinations with the same quality, there is still a remarkable discrepancy between contract and spot prices of LNG. The factors affecting price dynamics also differ among regions. European LNG buyers have experienced declining prices due to the weakening crude-oil linkage. Nevertheless, high volatility in spot markets has exposed them to the price risk. We expect that the high volatility in European markets will lessen as the trade volume increases over time. Japanese buyers, on the other hand, have purchased LNG at prices that do not reflect their own regional dynamics. Having been the largest LNG importers for decades, Japan and other Asian buyers should develop an alternative to crude oil-linkage and find a formula to purchase LNG whose price is determined by its regional factors.