Traded volumes and end-month open interest for the JKM LNG futures cleared on the Intercontinental Exchange (ICE) reached new highs in October as the market prepared for the winter season, according to exchange data and market feedback.

LNG futures traded volumes on ICE hit a three-year high of 100,755 lots in October, equivalent to approximately 19.38 million mt or 305 LNG cargoes. The volume increased 32.61% year over year and 5.36% month over month.

Notably, Oct. 25 saw substantial traded volumes of 10,163 lots for contracts from December 2024 to December 2026, with typical volumes remaining below 5,000 lots.

Trading activity for the January-December 2026 JKM LNG futures contracts, which usually see less liquidity than the 2025 contracts, totaled 3,690 lots on Oct. 25.

One broker suggested that the large volumes might indicate direct trades without broker involvement. A Singapore-based trader added that these trades could have been executed as part of hedging.

During the Platts Market On Close assessment process, the JKM LNG balance-month next-day futures maintained steady activity, with traded volumes totaling 3,185 lots in October, up 15.4% from September and 198.29% from the same month last year.

Open interest for the JKM LNG futures and balance-month next-day futures reached an all-time high of 131,678 lots on ICE as of Oct. 31, as per exchange data. This included 129,068 lots for the JKM LNG futures and 2,610 lots for the balance-month next-day futures.

The margin rate for the front-month JKM contract rose slightly by 1.73% month over month to $11,616 as of Oct. 31, according to ICE.

Meanwhile, trading activity for the JKM LNG options contract dropped 65%, with traded volumes at 800 lots and end-month open interest at 12,100 lots, down 13.39% month over month.

Asian physical LNG spot prices in October remained steady, with JKM prices hovering around the mid-$13/MMBtu level. The Platts JKM, the benchmark price for LNG delivered to Northeast Asia, rose slightly, averaging $13.384/MMBtu in October compared to $13.219/MMBtu in September.

Buying activity in the Japan-South Korea-Taiwan-China (JKTC) region remained muted amid the shoulder month, with several market sources noting that utilities have procured necessary cargoes for the upcoming winter season. Major LNG importer China faces high inventories, prompting some market participants to sell.

"If [JKM] prices go down to $12/MMBtu, the Chinese will buy, but for now, there is no demand at all," a China-based market source said.

While some held bearish views for the winter season, others noted that a drastic change in temperatures leading to a colder-than-usual winter may flip the weak demand signals observed in the market.

Despite the weak fundamentals observed in Asia, Asian spot LNG prices continue to hold in the $13/MMBtu region as the market monitors supply-related developments in the Atlantic basin. According to market sources, these developments can impact cargo competition between both basins.

Meanwhile, arbitrage opportunities in July were sparse amid narrowed spreads between Europe and Asia's spot LNG prices, providing traders with little opportunities to bring US cargoes to Asia.

Platts, part of S&P Global Commodity Insights, assessed the East-West arbitrage at minus 50.7 cents/MMBtu on Nov. 1, considering the H1 January JKM/H1 December NWE price spread against the US Gulf Coast to North Asia (via Cape of Good Hope) and Northwest Europe freight route costs.

However, traders noted that some may be able to point cargoes to the Far East amid weak freight rates and an ample number of ships in the market.