Soaring LNG Prices Push Asian Demand Toward Second Annual Decline

Analysts quoted by Reuters expect Asian LNG demand to decline this year by between 3% and 10%, driven largely by elevated spot prices after a supply disruption tied to QatarEnergy’s force majeure declaration. The analysts said much of the demand reduction is concentrated in northeastern Asia, where alternative fuels and available nuclear capacity have allowed some countries to cut back on LNG usage.

Rystad Energy analyst Lu Ming Pang told Reuters that Northeast Asian buyers absorbed a significant portion of the demand destruction because they could switch to coal or draw on nuclear power depending on their power mix. China, as the world’s largest LNG importer, is seen as particularly sensitive to price, and Kpler data show Asian imports are pacing toward their weakest September since 2018.

Kpler estimates put regional LNG imports at about 20.09 million tons for the month, down from 22.27 million tons a year earlier. Kpler analyst Nelson Xiong said high prices have pushed discretionary stocking by Chinese buyers into the future, with major replenishment likely deferred until late December or the first quarter of 2027 under current market conditions.

By contrast, India’s LNG demand is expected to hold up, supported by household gas consumption and the fertilizer sector, according to LSEG data cited by Reuters. The recent surge in prices — Reuters reported a jump to roughly $26 per mmBtu in mid-September from about $10.40 per mmBtu in late February — followed the force majeure on Qatari exports after Iranian strikes on the Ras Laffan hub, tightening short-term global supply and prompting shifts in regional demand and storage strategies.