If no meaningful improvement in Persian Gulf LNG exports this winter, TTF and JKM will likely reach 105 EUR/MWh and $35/MMBtu by year-end, assuming average winter weather, well above its 70 EUR/MW and $24.85/MMBtu base case under a gradually improving Hormuz LNG flow assumption.
The bank expects most of the gas demand destruction to take place in the industrial sector, which consumes a large amount of natural gas.
Direct conversations with India industrial users of gas suggest $30/MMBtu might be an important threshold to trigger incremental industrial gas demand destruction.
Some gas-to-coal switching might be taking place among China industrial users of gas.
European LNG importers are expected to largely pass through the high LNG costs downstream.
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