China’s liquefied natural gas (LNG) imports are projected to decline in 2025 for the first time in three years, according to revised forecasts from several research firms. This anticipated downturn is attributed to weak industrial demand combined with strong domestic and piped gas supplies. The reduction in imports from the world’s largest LNG buyer could have significant ramifications, potentially increasing global supply and exerting downward pressure on Asian spot prices, which have already dropped by 12% this year.
Analysts estimate that China’s LNG imports will fall between 6% and 11% from the 76.65 million metric tons recorded last year. Initially, higher import levels were expected, driven by economic stimulus measures from the Chinese government that were anticipated to boost industrial demand. However, tariffs imposed by the U.S. have affected China’s export capabilities, contributing to a slowdown in consumption.
Moreover, several months of year-on-year declines in China’s consumer price index reflect diminished consumer confidence, further impacting demand. Analysts from firms like Rystad, Kpler, and ICIS note that a milder winter and weak industrial activity have led consumers to prefer cheaper domestic gas and imports through pipelines over LNG. This anticipated decline marks an unusual interruption in a sector that has generally seen consistent growth.
In fact, the last contraction in LNG imports occurred during the pandemic lockdowns in 2022, according to customs data. Recent statistics reveal that imports during the first four months of 2023 fell to 20 million metric tons, a significant decrease from nearly 29 million tons during the same period in 2022. The trend of weakening demand is evident as buyers in China reduce their purchases from major suppliers such as Australia, Malaysia, and Russia, with imports from these countries down more than 20% year-on-year from January to April.
Australia’s shipments, for instance, decreased by 24% compared to the previous year. Data indicates that the drop is primarily due to reduced volumes from long-term contracts, while spot purchases remain stable.