Japan is expected to overtake China as the world’s largest importer of liquefied natural gas (LNG) this year, for the first time since 2022, as high LNG prices and sufficient storage in China limit purchases, analysts at ICIS and Kpler say.
Japan’s LNG demand will exceed, albeit slightly, demand in China, according to estimates by the consultancies compiled by Reuters. Imports into Japan are estimated at 62 million metric tons, while Chinese imports are expected at 61 million tons this year, according to ICIS. Kpler also sees a small edge of Japan over China in imports this year, at 63 million tons for Japan compared to 62 million tons for China.
China became the world’s biggest LNG importer in 2021, but the extended Chinese restrictions during two years of COVID-related lockdowns in the country pushed Japan to the top spot again in 2022.
China then regained the top importer status in 2023, and this extended into 2025.
This year, amid the Strait of Hormuz crisis, which halted LNG shipments out of Qatar and the United Arab Emirates (UAE), overall LNG import demand in Asia has plunged due to the high prices of spot cargoes in a suddenly tight market.
The Chinese decline, however, is set to be more prominent, allowing Japan to overtake China this year.
Chinese LNG buyers acted early to build gas stockpiles amid the Iran war, helping Beijing stock up enough inventories ahead of the winter.
As of the end of September, China’s underground gas storage was 80% full, according to Rystad Energy’s analyst Xiong Wei.
Lower demand for spot supply from China this winter could mean relief for other LNG customers in Asia and Europe, many of which have been struggling with high spot LNG prices and intensified competition for supply that doesn’t need to transit the Strait of Hormuz.
Japan, for its part, this summer reduced gas-fired generation in favor of coal as the price of liquefied natural gas remained elevated. LNG prices surged in Asia to a four-year high as very few cargoes manage to exit the Strait of Hormuz while competition with Europe for winter supply is intensifying.
By Charles Kennedy for Oilprice.com
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