Demand for liquefied natural gas in Asia is projected to fall between 3% and 10% this year due to elevated prices, marking the second consecutive annual decline. Northeast Asia is leading this reduction, with China significantly cutting discretionary purchases amid high costs.
Elevated LNG prices and reduced Asian demand could impact global energy markets, potentially affecting supply dynamics and pricing for other energy sources as importing nations seek alternatives.
Asian demand for liquefied natural gas is poised for its second annual decrease, with projections indicating a drop of 3% to 10% this year. This decline is primarily attributed to soaring global LNG prices, which have been exacerbated by a force majeure declared by QatarEnergy following Iranian strikes on its Ras Laffan gas hub. The publication cited Reuters, which reported that Northeast Asia is absorbing the majority of this demand destruction, with countries leveraging coal and nuclear power to offset reduced LNG consumption. LNG prices surged to $26 per million British thermal units in the week of September 11, a significant increase from $10.40 per mmBtu in late February. Data from Kpler, as reported by Reuters, indicates that Asian LNG imports are set to fall to 20.09 million tons this month, representing the weakest September since 2018. China, the world's largest LNG importer, is particularly sensitive to price fluctuations and is delaying discretionary stocking until late December or the first quarter of 2027. In contrast, India's demand is expected to remain robust, supported by its household gas needs and the fertilizer sector.