Free-falling LNG prices wreak havoc on trade amid coronavirus fears

Record low prices for liquefied natural gas (LNG) are roiling the global gas market, creating havoc as traders rush to find alternative locations for cargoes with Chinese buyers rejecting shipments amid the coronavirus epidemic.

Asian spot prices for LNG have already tumbled to troughs of $3 per million British thermal units (mmBtu) – less than half of what they were at the same time last year.

At least one cargo bound for India has already traded below $3/mmBtu, down 30 cents within a week, traders said.

Concerns that Chinese companies could back out of contracts because of the impact of the coronavirus outbreak have slowed oil and gas sales into China. Reuters reported on Thursday that China’s top LNG buyer China National Offshore Oil Corporation (CNOOC) declared force majeure on some prompt LNG deliveries with several suppliers.