Lahore, April 11: Asian spot liquefied natural gas (LNG) prices have dropped to their lowest level since July, with weak demand, high inventories, and global recession fears keeping the market under pressure.
The average price for May deliveries to Northeast Asia has fallen to $12.50 per million British thermal units (mmBtu), while June contracts are estimated at $11.30/mmBtu. Analysts predict prices could decline further if demand remains sluggish.
U.S.-China Trade Tensions Keep Market on Edge
Market analysts attribute the downturn to ongoing trade tensions between the U.S. and China. While a temporary 90-day pause in tariffs has provided some relief, concerns linger as the trade dispute continues to disrupt global energy markets.
“Restocking in Northeast Asia remains subdued, and demand is unlikely to rise unless LNG prices dip below $12/mmBtu,” said Kpler analyst Go Katayama. Japan and Korea, two of Asia’s largest LNG importers, currently hold high stockpiles, dampening the need for fresh imports.
Read more: Pakistan Avoids Overloads of Gas Flow by Redirecting LNG Cargo
Asian LNG Market Takes a Hit
China, the world’s largest LNG importer, is now reselling U.S.-sourced cargoes due to escalating tariffs that have made American LNG too expensive.
According to Rystad analyst Wei Xiong, China’s halt on U.S. LNG imports is expected to continue, further limiting incremental demand growth. The country’s industrial sector is slowing down, and with rising tariffs, the overall impact on LNG consumption could be significant.
Europe’s LNG Market Remains Strong
While Asia’s LNG demand struggles, Europe has maintained steady imports. The North West Europe LNG Marker (NWM) price benchmark for May deliveries stood at $10.127/mmBtu, a $0.805/mmBtu discount to Dutch TTF hub prices.
Read more: Asian Markets Plunge Amid Tariff Tensions and Recession Fears
Analysts at S&P Global Commodity Insights and Argus have reported similar price trends, with European demand holding firm despite falling global prices. Angola LNG’s recent sale to France instead of Asia is a clear indication that European markets are absorbing excess supply.
Freight Rates Decline as LNG Trade Slows
LNG freight rates have also declined, with Atlantic rates dropping for a third consecutive week to $22,500/day, while Pacific rates dipped to $24,750/day.
As market uncertainty continues and trade tensions remain unresolved, LNG traders are bracing for further price fluctuations in the coming months.
