IGL, MGL, Gujarat Gas: Decline in Asian spot LNG price to aid earnings prospects

livemint.com:

Indraprastha Gas Ltd (IGL) , Mahanagar Gas Ltd (MGL) and Gujarat Gas share prices have seen volatility in the recent past. The Mahanagar Gas share price that had outperformed peers during past one year , however declined almost 10% in a month on concerns of its exclusivity in operations in the Mumbai region coming to an end. Indraprastha Gas on the other hand has seen elevated concerns on rising EV (electric Vehicle) penetration in Delhi NCR (national capital region) impacting CNG demand.

For Gujarat gas the competition it faces in Morbi industrial cluster from cheaper propane supplies have led to impact on share prices. Indraprastha Gas and Gujarat Gas share prices are also almost flat over last month Nevertheless, the declining sport LNG (Liquified Natural Gas) prices could prove to be a good news and trigger the share price. The lower LNG prices will mean lower input costs and hence higher margins.

Also Read- SBI share price falls 2% on weak sentiment post electoral bond case hearing in Supreme Court Due to weak demand and excessive inventory in both Asia and Europe, the price of Asian spot LNG has dropped to a 3-year low of about $ 8.3 per mmbtu (million British Thermal units), or 10% of Brent (compared to the historical average of about 15%), suggest the JM Financial Institutional Securities report. The price of European gas is likewise lower, at about $ 8–9% per mmbtu. The price of US Henry Hub gas also dropped to $1.9 per mmbtu as per JM Financial analysts and was helped by a brief halt in the approval process for new LNG export facilities and a fall in local demand.