(Bloomberg) — China’s imports of liquefied natural gas are set to drop this month from a year earlier, according to ship-tracking data, as higher prices triggered by the war in the Middle East weighed on consumption.
Deliveries are estimated at around 5.2 million tons in August, 18% lower than the same month last year, according to the data from Kpler. That’s a stark contrast from the year-on-year jumps seen over the previous three months, which were supported by a push to refill inventories to meet peak summer demand.
Asian LNG prices averaged around $21 per million British thermal units this month, compared to $12/mmbtu last August, which has led to “significant demand destruction among price-sensitive industrial users,” said Nelson Xiong, senior LNG analyst at Kpler.
Spot prices hit a five-month high earlier in the month as the conflict between the US and Iran dimmed the outlook for flows resuming in the key Strait of Hormuz. Visible LNG traffic through the strait, which had accounted for about a fifth of the world’s shipments, has essentially halted over the last two months. Crude oil flows, conversely, have proven more resilient.
The Persian Gulf normally supplies about a third of China’s LNG, and the prolonged disruption has prompted the nation to seek more volumes from elsewhere, including Russia and Malaysia.
A drop in demand from one of the world’s biggest buyers could provide relief for importers in Europe, which are under pressure to replenish below-average inventories ahead of the winter heating season.
Factors that might boost Chinese demand include a colder-than-expected winter, or a slower recovery in domestic gas production, as well as a resolution to the US-Iran war, said Xiong.
The nation’s total 2026 imports are expected at around 61.3 million tons, he said. Last year, deliveries totaled 68.4 million tons, according to Chinese customs.
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