Asian spot liquefied natural gas (LNG) prices have recently descended to their lowest point in over eight months due to weak demand, elevated inventories, and concerns surrounding a potential global recession, largely influenced by the implementation of tariffs by U.S. President Trump. The average LNG price for May delivery to northeast Asia was recorded at $12.50 per million British thermal units (mmBtu), the lowest since late July. Estimated pricing for June delivery stands at $11.30/mmBtu. Analysts, such as Go Katayama from Kpler, noted that Asian LNG prices are facing downward pressure due to a combination of factors — weak seasonal demand and high stock levels in key regions such as Japan and Korea.
Although the U.S. has temporarily paused some tariffs, the ongoing tensions and tariffs on Chinese goods continue to create a cautious market sentiment. Katayama emphasized that restocking activity in Northeast Asia is likely to remain low unless prices fall below $12/mmBtu or if there are significant changes in weather forecasts. The global market sentiment shifted this week as Trump’s broad tariffs sparked fears of a recession and escalated the trade conflict between China and the United States. As the world’s largest LNG importer, China is currently re-selling U.S.-sourced cargoes due to increased import costs from the ongoing tariff disputes.
Rystad analyst Wei Xiong indicated that the halt in U.S. LNG imports by China, compounded by subdued gas demand growth, is expected to limit incremental LNG demand moving forward. In Europe, however, demand has remained relatively strong compared to Asian markets, with various pricing benchmarks reflecting this trend. Despite the drop in Asian prices, European LNG has shown resilience, suggesting a potential shift in market dynamics.