China’s LNG Prices Slide to a Five-Year Low as Winter Demand Disappoints

Prices for liquefied natural gas in China have fallen to the lowest in five years as demand failed to live up to expectations despite winter being peak season, driven by heating demand.

Citing data from a Chinese commodities pricing outlet, Bloomberg reported the wholesale price per million British thermal units of LNG had dropped to some $10.72 this week, which was the lowest since the middle of 2021.

Earlier in December, S&P Global also reported that Chinese wholesale LNG prices had dropped to the lowest in five years, citing a wholesale price of around $540 per metric ton. Compared to that, the price cited by Bloomberg was even lower, at $497 per ton.

Traders have attributed the price drop to a combination of factors, including high levels of gas in storage and an abundance of supply. What’s more, the weather forecast suggests milder than expected temperatures in parts of the country, and industrial demand has remained subdued, according to S&P Global.

Meanwhile, China’s LNG imports have been on the decline for 13 months straight. The country’s November total in imports was seen at 5.81 million tons, which would be a 5.5% decline from a year ago, Kpler said in late November. The decline would be significantly smaller than the ones registered for the previous two months, both of which were at over 10% on the year.

Fresh data, however, showed a rebound in LNG imports last month, at 13.6% from a year earlier, with pipeline gas imports also higher, by 7.9%. Overall, however, analysts expect lower LNG imports for this year than in 2024. Reuters’ Clyde Russell pegged these at 64.6 million tons for 2025, down from 78.27 million tons for 2024, based on import data from Kpler. The lower Chinese LNG imports will drag down Asia’s total for the year, although elevated prices earlier in the year affected inbound shipments as well.

By Irina Slav for Oilprice.com

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