Soaring LNG Prices Force China to Slash Imports

The average cost for Asian LNG hit $21 per million British thermal units (MMBtu) this month, a sharp climb from $12 per MMBtu a year ago. Last week, spot prices reached a five-month peak of $23.388 per MMBtu, hovering at four-year highs. This volatility stems from a shrinking pool of Middle East cargoes, exacerbated by the absence of Qatari term deliveries since the onset of the Iran war.

Adding to the supply strain, QatarEnergy has extended its force majeure on LNG shipments through early November. With Asian utilities aggressively outbidding European buyers for the remaining available supply, China’s imports are projected to drop to approximately 5.2 million tons for the month. This shift abruptly ends the recovery trend that began in May, when Chinese buyers had successfully rebounded from an eight-year import low.