India shifting to term contracts despite expected drop in spot LNG prices: S&P

Buying Spot Or Not?

- SUBHAYAN CHAKRABORTY

India's demand for spot cargoes of Liquefied Natural Gas (LNG) is expected to reduce as importers shift towards medium and long-term contracts over the next two years, as a result of multiple deals that come into effect as early as next month, S&P Global Commodity Insights said on Thursday.

But the higher reliance on term contracts could be poorly timed as the market expects a flush of new supply that could drive spot prices lower, leaving Indian buyers exposed to more expensive contracted LNG, it pointed out in a note.