Asian spot LNG prices fell last week to a new one-year low on weak demand and trade wars raising concerns over long-term Asian demand.
The average LNG price for June delivery into northeast Asia was $11 per MMBtu, the lowest level recorded since mid-May, 2024 and down from $11.80 per MMBtu last week, industry sources estimated.
"LNG price expectations have been transformed in the last two and a half months. US President Trump’s tariff war is set to slow global demand, European gas storage targets are being weakened and imports into the world’s biggest LNG buyer, China, have slumped," said Alex Froley, ICIS senior LNG analyst.
China's demand remained subdued, with LNG imports down 26% in April, 2025 compared to April, 2024, while imports for January/April this year were down 23% from the year before, Froley added.
Toby Copson, chairman at Davenport Energy Partners, said that there was very little fundamental demand in the East for spot cargoes, and utilities aren't stepping in yet to cover cooling demand.
"Sentiment is negative. I don't see a floor yet. If price- sensitive nations start picking up attractive lower prices, we might see rates stabilise. However, trade wars create demand destruction, and there is plenty of supply available," Copson said.
Trade tensions continued to weigh on the outlook for LNG demand this year especially from Asia, with China re-exporting record volumes of LNG in April, said Rabobank energy strategist, Florence Schmit.
In South Korea, buyers sought cargoes to refill low storage levels and there was also stronger demand from Indian buyers, due to low price levels, said Martin Senior, Argus' head of LNG pricing.
Europe prices fall
In Europe, northwest European delivered prices fell, mostly because of new regulations from the German government reducing its own national gas storage targets for this winter to 70% from the existing 90%.
This has reduced summer demand expectations, Senior added.
Rabobank's Schmit added that the weakness in Asia would help ease supply tightness for Europe during the summer injection season, saying that threats of tougher US sanctions on Russia’s energy sector and EU's plans to phase out Russian gas remain bullish risks for the gas markets.
S&P Global Commodity Insights assessed its daily North West Europe LNG Marker (NWM) price benchmark for cargoes delivered in June on an ex-ship (DES) basis at $9.78 per MMBtu on 1st May, a $0.75 per MMBtu discount to the Dutch TTF hub June price.
The US arbitrage to northeast Asia via the Cape of Good Hope remained closed, while the arbitrage via Panama continued to marginally advantage Asia, said Spark Commodities analyst, Qasim Afghan.
In the LNG freight market, Atlantic rates rose for the second week in a row to $40,750 per day last Friday, while Pacific rates remained flat at $22,550 per day, Afghan added.
Last week, China returned to the LNG spot market, purchasing at least two cargoes at around $10 per MMBtu, according to sources talking with Bloomberg.
More buying could be seen this week, traders said.
Consistent purchases by China and other importers may help slow the recent decline in Asian and European gas prices.
“Prices at the moment are weak,” FGE Chairman Emeritus, Fereidun Fesharaki said on Bloomberg TV. “ By the end of this year, prices could go 50%- 60% higher than they are today.”
