Heatwave fails to fire up Japan's LNG prices

Extensive use of term contracts has protected utilities from the cost of extreme weather but looming nuclear shutdowns could leave them exposed

LNG sellers expecting the second consecutive summer heatwave in Japan to again drive up spot prices have been left disappointed. Abundant global LNG supply and the widespread use of term contracts have contained prices, while drawing on domestic inventories and reopened nuclear plants has cooled the need for imports. But nuclear safety measures—which could force the closure of reopened plants and prevent others being returned to service—point to a potential surge in gas demand next year. A spike in temperature during July and early August—which left more than 57 dead and 18,000 hospitalised—increased the demand for electricity to power air conditioning units. It was severe enough for Tohoku