Asian spot liquefied natural gas (LNG) prices have reached their lowest levels in nearly six months, largely due to the impacts of U.S. President Trump’s newly imposed tariffs, which have unsettled global markets amid recession concerns. As of Friday, the average LNG price for May delivery to north-east Asia remained stable at $13.00 per million British thermal units (mmBtu), a figure that has not changed since last week and is the lowest recorded since October 11. Analysts are expressing concerns about the broader implications of global trade tensions and potential economic slowdowns. Alex Froley, a senior LNG analyst at ICIS, remarked that fears surrounding a trade war and sluggish economic growth are dampening stock markets and are likely to influence energy prices negatively.
Countries worldwide are retaliating against Trump’s tariffs; notably, China has implemented a significant 34% tariff on U.S. goods, escalating the ongoing trade conflict between Washington and Beijing. Klaas Dozeman, a market analyst at Brainchild Commodity Intelligence, highlighted that this volatile environment, characterized by tariffs reaching as high as 34% on imports to China and similar rates for India, South Korea, and Japan, could severely impact global trade and industrial production, ultimately reducing LNG demand further. The previous tariffs have already resulted in a halt of U.S. LNG cargo deliveries to China since February. In Europe, gas prices have also plummeted to a six-month low, tracking declines in oil and stock markets.
Hedge funds have liquidated gas holdings in response to decreased commodity prices. Although the European Union is contemplating countermeasures against Trump’s tariffs, analysts suggest that Europe must continue importing U.S. LNG, as retaliatory tariffs are unlikely to extend to the commodity. Additionally, the weakening of the dollar may make U.S. LNG more competitively priced for European buyers, encouraging increased imports as they look to stock up in anticipation of future demand. Price assessments for May deliveries highlight U.S. LNG’s attractive pricing in relation to European markets.
In terms of maritime logistics, the LNG freight market has seen recent fluctuations, with Atlantic rates falling while Pacific rates have increased.