* Cargoes trade in $2.40-2.65/mmBtu range this week - traders
* U.S. cargo cancellations boost spot prices - traders
* Demand improves in China and South Korea - traders
By Jessica Jaganathan
SINGAPORE, May 13 (Reuters) - Asian spot prices for liquefied natural gas (LNG) have jumped by at least 20% in a week as supply of the super-chilled fuel tightens amid fewer cargoes arriving from the United States and as demand rebounds in the region, several traders said.
Several cargoes have changed hands at $2.40 to $2.65 per million British thermal units (mmBtu) this week, compared with about $2 per mmBtu last week, the traders said.
“U.S. cargo cancellations and some Asian production being reduced is coming at the same time when some buyers’ demand is emerging,” a Singapore-based LNG trader said.
As Asian spot prices LNG-AS tumbled to a record low of less than $2 per mmBtu earlier this month, briefly dropping below U.S. natural gas prices, buyers in Asia and Europe have cancelled the loading of about 20 cargoes from the United States in June, sources have said.
Several traders said the cancellations included cargoes loading in July, though this could not immediately be confirmed.
Companies holding portfolio positions such as BP, Total and Shell are also buying cargoes in Asia to cover their shorts from the United States, two traders said. Companies typically do not comment on their trade flows.
“June supply is a bit tight because of the U.S. cargo cancellations, so prices are going up,” a Beijing-based source said.
Production curbs in Malaysia and Australia are also causing supply tightness, two traders said.
Meanwhile, recovering demand in China and South Korea, as novel coronavirus lockdowns and movement restrictions are gradually lifted and businesses return to work, is also pushing up prices, traders said.
For instance, South Korea’s GS Energy bought a cargo for June delivery at about $2.60-2.70 per mmBtu while Chinese utility Guangdong Energy group, previously known as Guangdong Yudean Group, bought a cargo for July delivery at about $2.40 per mmBtu.
China’s Foran Energy Group bought a cargo for June delivery at $2.60 per mmBtu while Thailand’s PTT bought a cargo for late June at about $2.30 to $2.50 per mmBtu, traders said.
“China has lowered its risk level for COVID-19, so it seems like things are going back to normal,” a Beijing-based source said, referring to the disease caused by the coronavirus.
Indian demand is also expected to recover soon as industries return, traders said. (Reporting by Jessica Jaganathan, additional reporting by Ekaterina Kravtsova Editing by Robert Birsel)