Platts Japan Korea Marker is the LNG benchmark price assessment for spot physical cargoes delivered ex-ship into Japan and South Korea.

As these two countries take the largest share of LNG imports in the world, Platts JKM is thus a key reference in marking product value/market price from supply source to the destination market.

In the LNG market space, traditional patterns of trade are evolving fast; where cargoes once changed hands only through opaque bilateral deals, the market now exhibits open sell and buy tenders for multiple and single cargoes, brokered trades, cargoes sold in longer chains and speculative trading positions taken up by non-traditional players, adding to liquidity on the spot market.

The JKM benchmark is reflective of a typical cargo being traded in Northeast Asia. For cargoes being bid and offered within the region which are outside of the regular range, Platts incorporates the value of non-typical cargoes by adjusting the value to reflect their deviance from the standard. E.g If the offer is for delivery only to Tianjin in China, rather than all of Northeast Asia, then the offer is adjusted downwards, as it is a less flexible cargo. Or if the cargo is for delivery to a non-standard delivery point, it is adjusted via a freight differential.

When Platts explains that a bid was normalized to $x/MMBtu on richer specifications as well as larger cargo size, it means that given the bid was for a cargo of higher gas spec than their standard, and the cargo size is larger than their standard, they normalized the bid price down, in order to reflect the greater difficulty in someone trying to meet the requirements.