China LNG Imports Likely to Fall in 2025 Due to Weak Industrial Demand

• China LNG Imports set to drop for the first time in three years due to weak industrial demand and strong domestic gas supply.
• China's LNG imports forecasted to fall 6-11 percent in 2023, impacting global LNG supply and Asian spot prices.
• China's LNG consumption hit by weak industrial demand and mild winter, with domestic gas gaining preference over imports.

Five research firms predict that China's annual liquefied natural gas (LNG) imports are expected to fall for the first time in three years due to weak industrial demand and a good supply of domestic and piped gas.

A drop in imports by the world’s biggest LNG buyer would increase global supply and drag down Asian spot prices, which are already down 12 percent this year.

Imports are expected to fall between 6 percent and 11 percent from the 76.65 million metric tons delivered last year. Previous estimates suggested that imports would fall to an all-time high as stimulus measures from Beijing were expected to boost industrial demand.

U.S. tariffs have affected exports of LNG from China, according to Rystad analyst Xiong Wei.

Also Read: LNG Traders Redirect U.S. Cargoes from Europe to Asia Amid Price Shifts

"China’s consumer price index has also posted year-on-year declines for several consecutive months, reflecting weak consumer confidence," said Xiong.

According to analysts at Rystad, Kpler and ICIS, overall natural gas consumption has been hit by weak industrial demand and a mild winter.

Consumers are moving toward the cheaper domestically produced gas or piped gas, they said.

The fall in imports would also be an unusual blip in a sector that otherwise has seen steady growth. According to customs data, China's LNG imports contracted last in 2022 as demand dropped sharply in the pandemic lockdowns.

Customs data indicated that China's imports decreased to 20 million metric tons in the first four months of this year, down from about 29 million metric tons in the same time period last year.

According to Rystad Energy, gas consumption from the industrial and chemical sectors combined will fall by approximately 1 percent. According to Kpler analysts, combined demand from the industrial and chemical sectors usually rises by 10 to 15 bcm each year.

"Even with a sudden and sharp rebound in the second half, it wouldn't be enough to offset the weakness seen so far," said Yuanda Wang, a senior analyst at ICIS.