fallen , demonstrating the country ’ s capacity to react promptly when required to market developments and price moves . ( See chart ). “ We see less than 10 cancellations in October ,” says Bryan , adding “ it ’ s going to be dependent on prices , but the current forward curve will certainly incentivise imports into Europe .”
Energy Aspects says a price of EUR 13 / MWh is required to facilitate US LNG flows , meaning levels at the time of writing for the Dutch TTF November and December contracts , of EUR 13-14 / MWh , should encourage more transatlantic shipments . Analysts at Icis estimate September cancellations will total a little over 20 , compared with 50 in August . The consultancy also currently expects US LNG exports to rise by around a quarter this year , and potentially by more than 40 % in 2021 . “ Right now , winter spreads are favorable for US LNG exports to Europe and Asia , a definite improvement over the summer , when cancellations from US offtakers were at an unprecedented high ,” says Icis ’ s LNG America ’ s editor , Ruth Liao . Indeed , the EIA expects US LNG exports to return to pre-coronavirus levels by November and average more than 9bcfd from December through to February .
As such , the US ’ s burgeoning LNG market is displaying certain parallels with the country ’ s waning coal sector . While being a key supplier to the European and Asian seaborne coal markets , producers have always been quick to react to any fluctuations in global prices – either switching from one basin to the other or halting exports entirely if prices sink too low . While Russian or Colombian coal exporters – who have lower overall production costs – continue to export steadily throughout the year , only generally halting if there are weather , technical or industrial disruptions , the US has been much more of a swing supplier . It enters the seaborne market once prices become sufficiently high , then exits once the increased transatlantic – or transpacific – flows again push prices back down again , squeezing profit margins .
Likewise , other LNG producers , such as Russia and Qatar , have not been able or willing to react so markedly this year to price developments , in part due to less flexible supply contracts . “ I think US LNG supply contracts were designed to have a lot of flexibility and this year has been an excellent example of that flexibility playing out ,” says Energy Aspects analyst Jane Rangel .
An analyst with a European utility , who asked to remain anonymous , agrees there are certain traits mirrored between the country ’ s two seaborne fuel export markets , but that for US coal exporters , it was
32
Montel Magazine 3 – 2020