Gas
China trims LNG imports as domestic supply undercuts global spot prices
China has reduced its liquefied natural gas imports ahead of peak demand due to abundant domestic supplies and lower local prices.
Key points
- China's national average LNG price stood at $21.97 per million British thermal units.
- State-owned energy majors have released gas from inventory after completing their stockpiling drives.
- Asian spot market LNG prices recently topped $30 per million British thermal units amid export disruptions in Qatar.
What happened
According to OilPrice.com reporting, China has scaled back its liquefied natural gas purchases despite the onset of the peak demand season. An abundance of domestic gas has suppressed local costs, making international spot market acquisitions less appealing for buyers in the country.
Bloomberg reported that the Chinese national average for liquefied natural gas was $21.97 per million British thermal units. This rate sits nearly $10 below the benchmark Japan/Korea Marker. State-owned energy companies have concluded their seasonal stockpiling campaigns and are now releasing volumes from their inventories, further boosting internal availability.
China remains one of the world's largest and most price-sensitive importers of the commodity. Traders previously reined in inbound shipments earlier in the year when prices surpassed $20 per million British thermal units, maintaining those restrictions through September. At the same time, Asian spot market prices exceeded $30 per million British thermal units in late October for the first time since December 2022, driven by supply and demand imbalances and ongoing disruptions to Qatari exports.
What comes next
The reduction in Chinese demand offers relief to other Asian and European importers who are actively securing winter supplies. European futures markets have seen some easing, with prices dropping to €86.80 per megawatt-hour from over €100, aided by shifting political expectations in the United States.
Why it matters
For energy investors and African gas producers, shifts in Chinese import demand carry significant implications for global trade flows and pricing structures. As major Asian consumers pull back from spot markets due to favorable domestic alternatives, global liquefied natural gas dynamics can experience sudden reallocations. African producers looking to expand their export footprints into Europe and Asia must navigate these volatile pricing environments, where Asian price sensitivity can rapidly redirect cargoes and alter international revenue expectations. Understanding these demand contractions helps regional regulators and investors anticipate how global market liquidities might impact broader energy infrastructure investments across developing markets.
Original reporting
This article draws on the following reports. Read them in full on the publishers’ sites.
Context from CEII
Gas is the flexible backbone of many grids and the designated transition fuel in many national plans, from LNG trade to domestic LPG and CNG. Supply security and pricing drive both power reliability and emissions.
3.0% of electricity in China came from gas in 2024Countries in this story
Written by the CEII Desk, the Centre’s automated newsroom, from the reporting credited above and CEII’s own data. Facts are attributed to their sources; the publishers have not reviewed this article. Spotted an error? Tell our editors.
