Asian based LNG importers seek to avoid costly spot buys
When the market conditions are right, spot buys can mitigate your risks and potentially save you some dollars. Customs data from the Ministry of Finance shows that a year ago, this was this case, with some Japanese importers picking up June or July deliveries at approximately $2/MMBtu. Meanwhile, shipments imported through long-term contracts were coming in around $8-$11/MMBtu for the same time period.
Volatility has increased, with record highs and lows being recorded in a period of 9 months. Between 2020 and 20201 market dynamics have been turned on their heads.
Today, as spot pricing currently hovers above most contract pricing and with market prices for Liquefied Natural Gas (LNG) expected to remain above that of legacy crude-linked contracts for most of 2021, buyers are opting to optimise their buys through contracts and are spurning spot.
To help close the gap caused by the seasonal summer spike in demand, Asian based LNG importers are seeking alternative options such as making adjustments to Annual Delivery Programs, swapping cargoes, or exercising Upward Quality Tolerance (UQT) with long-term contract suppliers.
"Last year we saw [some importers] exercising [Downward Quality Tolerance] but this year, it's the opposite. They want to lift as much as their long-term volumes", said a Singapore based trader.
An Asia-Pacific based producer said, "There are quite a lot of requests from end-users for earlier delivery of [Annual Delivery Program]"
Some Asian LNG importers still preferring long-term contracts
Somewhat constrained supply paired with increasing oil demand over the coming two months has some Asian importers still preferring long-term contracts.
S&P Global Platts Analytics expects oil stocks to be drawn down and crude oil prices to surge before dropping back in Q4.
"With a lag, JCC prices are likely to go above $75 per barrel in August and September before retreating to under $70 per barrel by the year-end", stated S&P Global Platts analyst Kang Wu.
While the spot market remains high, look forward, the market is expected to slowly taper down over the next three years.
"The LNG spot market is expected to stay relatively tight through at least 2023, and JKM is forecast to stay above $8.00/MMBtu on an annualized basis until 2024 when a new wave of liquefaction projects will come online", S&P Global Analyst Jeff Moore commented.
Amobee Appoints Nick Brien As CEO
In its latest strategic move, Amobee—a global multimedia advertising leader—announced that Nick Brien will be its Chief Executive Officer. The company is entirely owned by Singtel, Asia’s leading communications technology organisation, which provides consumers with mobile, broadband, and TV and businesses with data hosting, cloud, network infrastructure, analytics, and cybersecurity tools.
Brien, who has worked for Microsoft, Intel, P&G, and American Express, will take over to drive the next generation of advertising tech. Said Evangelos Simoudis, Chairman of the Board of Amobee: ‘Nick has the deep expertise in advertising that we need to seize the market opportunities ahead’.
How Did Brien Get Here?
Before joining Amobee, Brien led 15,000 people across 40 divisions as CEO of the Americas for Dentsu International. For thirty years, he’s helped brands pilot unique advertisements, keeping up with the latest trends. He’s served as CEO of McCann Worldgroup, global CEO of IPG Mediabrands, President of Hearst Marketing Services, and CEO of iCrossing. Over the course of his career, he’s consistently strategised how to keep up with digital shifts. Now, he’ll capitalise on Amobee’s legions of experienced data scientists and developers.
‘I’m excited to be joining Amobee at such a transformative time in our industry’, Brien explained. ‘We’ll pilot advertising accountability and intelligent decisioning. And there’s no doubt in my mind that optimising media performance—whether you’re targeting, planning, buying, or delivering—can only be achieved using applied science, machine learning, and data analytics’.
What Does This Mean for Amobee?
Amobee is set on growing its personal brand within the advertising sector. As APAC social media influencers, Gen Z growth hackers, and viral content producers start to enter the field, established companies will be working doubly hard to keep up. Amobee, however, is still looking good. With a Gartner Magic Quadrant for Ad Tech, a Forrester New Wave recognition, and now, Nick Brien as CEO, the firm is set up for success.