2021 saw a surge of interest in new long-term contracts
LNG short-term liquidity goes into reverse
Spot and short-term LNG trading have fallen sharply as concerns over price volatility and supply security make term contracts more attractive, says importers’ group Giignl
The commoditisation of the LNG business—as enumerated by volumes traded on a spot and short-term basis—went into reverse last year, according to data published by importers’ group Giignl, as buyers fretted over price volatility and supply security. On the flip side, 2021 saw a surge of interest in new long-term contracts, especially on the part of Chinese buyers, which accounted for 26mn t/yr of the 70mn t/yr contracted on a long-term basis. The reversal is striking given that a growing share of spot and short-term procurement has generally been seen as a sign of the increasing sophistication and flexibility of the LNG business. “Due to high prices, some Asian buyers preferred to max out the
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