LNG Short-Term Outlook - September 2021

Despite recovering global LNG supply, and the promise of imminent Russian flows into Europe, European TTF and global spot LNG prices continue to climb to unprecedented pre-winter highs. APAC demand growth: Robust demand from both China (YTD +24%) along with Korea (YTD +21%) have effectively reduced Atlantic LNG availability, despite production growth from the US. This is evident from the -8% YTD decline in non-APAC LNG deliveries, and this already includes the more-than-doubling in South American imports. The largest casualty from this tight global balance is the loss of LNG imports into Europe, worsening an already supply-constrained domestic market. We forecast growth into Northeast Asia to slow in Q4 as economic recovery slows in China, and Korea absorbs its close-to-record levels of inventory, however, the usual winter weather risk continues to provide upside demand potential.