OREANDA-NEWS. January 09, 2015. The Platts JKM for February delivery lost 5 cents/MMBtu this week, closing at USD 10.025/MMBtu Friday, as the holiday season brought trading activity to a standstill across most of the region.

Low demand and high inventory levels continued to weigh on the market, with sources reporting deals for both February and March delivery around the USD 10/MMBtu mark.

The highest bids for February in North Asia held steady throughout the week at around USD 9.90/MMBtu, while the lowest offers were also steady around USD 10.30/MMBtu, sources said.

While buying interest for February was limited, only a few suppliers have cargoes remaining, meaning that those seeking volumes for specific delivery windows could be willing to trade at above USD 10/MMBtu, sources said.

The most recent deal was heard transacted over 10 days ago, with a Japanese utility buying an H1 February cargo in the high USD 9s/MMBtu from a trader, although this could not be confirmed.

High inventories in tank had enabled buyers to defer deliveries to March, keeping the inter-month backwardation narrow.

Two South Korean independent buyers and several Japanese power utilities were still showing an interest in cargoes for both months, although demand would depend on the price, sources said.

Private buyers in China were also showing some interest to take cargoes for both months, but several sources said offers above USD 11/MMBtu had dampened the demand.

Potential deals to non-traditional buyers in China were commanding a premium due to uncertainty around the availability of delivery slots at state-owned buyers' terminals, Chinese sources said.

Further out, already one or two March deals were heard to have been transacted ahead of the Christmas and New Year holidays.

Early indications showed prices at similar levels to those seen for H2 February, around USD 10/MMBtu. However, the bulk of negotiations for March were still to start, as most Japanese utilities were absent in the week ending January 2.

The most recent forecast from the Japan Meteorological Agency for the month ahead showed that temperatures were now expected to be average across the country, with only the northern Hokkaido region showing a 40% probability of being warmer than the average temperatures for February.

On the supply side, portfolio sellers were offering February volumes from both the Atlantic and Pacific basins.

Spanish terminals continue to hold high inventories, about three-quarters full despite increased injections into the grid, according to data from grid operator Enagas.

Falling onshore prices in Europe also fueled the downward pressure on reload offers.

In India, prices were steady at USD 9.90/MMBtu for February delivery, with buyers showing bids of less than USD 9/MMBtu as the recent fall in crude oil prices crimped the ability to sell more expensive LNG to consumers downstream, resulting in higher inventories at import terminals.

Fuel switching was also heard to be taking place in Japan, where several power generators were burning more oil instead of natural gas, sources said.

This further cut the demand for incremental LNG cargoes, a trend that could continue well into 2015 as lower crude oil prices are likely to drive LNG buyers back to lift more term cargoes from suppliers next year.

Some market sources, however, expressed skepticism about the extent fuel switching had affected spot demand among Asian utilities.

Elsewhere, Platts ship tracking software cFlow showed that Queensland Curtis LNG's first cargo was still loading. The Methane Rita Andrea was moored at Australia's Gladstone port after having arrived there on December 26.

The vessel is expected to complete its loading in the early part of the coming week before sailing to China.

Term buyer China National Offshore Oil Corp. was said to be the buyer of the first cargo.