Europe drives LNG import growth as Asia stumbles on higher price: Russell
LAUNCESTON, Australia - Global imports of liquefied natural gas (LNG) ticked higher in the first half of 2025 as stronger European demand pulled cargoes away from Asia.
Total imports of the super-chilled fuel were 208.62 million metric tons in the first six months of this year, up 1.7% from the 205.11 million for the same period in 2024, according to data compiled by commodity analysts Kpler.
Asia, the top LNG buyer, saw imports drop 9.09 million tons, or 6.4%, to 133.41 million, while Europe's arrivals jumped 21.6%, or 11.8 million to 66.43 million.
The numbers confirm that Europe is turning increasingly to LNG as it attempts to replace pipeline natural gas from Russia, which has been severely curtailed since the Russian invasion of Ukraine in February 2022.
The trend to higher LNG arrivals in Europe is also likely to continue given the continent is behind in filling natural gas inventories ahead of the peak winter demand season at the end of the year.
According to data from S&P Global Commodity Insights, Europe's storages were 56.8% full at the end of June, which is well below the 75.5% they were at the same time last year.
This means that Europe is likely to continue buying LNG at relatively high levels and the usual tapering of imports in the shoulder season between the summer and winter peaks may not be as pronounced this year.
Europe's LNG imports have eased since hitting the second-highest on record of 12.78 million tons in March, dropping to 9.79 million in June, according to Kpler.
But it's worth noting that every month this year has seen higher imports than the corresponding month in 2024, with June's arrivals of 9.79 million tons being 36% higher than the 7.19 million from the same month last year.
PRICE GAINS
The robust demand from Europe has kept Asian spot LNG prices higher than they were in 2024, and also smoothed out the usual seasonal declines in the shoulder season between winter and summer peaks.
Spot LNG for delivery to North Asia was assessed at $13.10 per million British thermal units (mmBtu) in the week to June 27, dropping from a four-month high of $14 the prior week as tensions eased in the Middle East with a ceasefire between Israel and Iran.
The low so far in 2025 has been $11 per mmBtu in the week to May 2, but this price was well above the low from 2024 of $8.30 in March of that year.
The highest price so far in 2025 of $16.10 per mmBtu in February is also higher than any price recorded in 2024 and was the most since December 2023.
The elevated spot prices in Asia have seen buyers in price-sensitive markets like China and India trim purchases.
China, the world's biggest LNG importer, has seen lower arrivals in every month so far in 2025 when compared with the same month in 2024.
China imported 5.12 million tons in June, which was up from May's 4.90 million, but was still below the 5.87 million from June last year.
For the first half of 2025, China imported 30.27 million tons, down 22% from the 38.79 million from a year earlier, according to Kpler data.
The decline in India's LNG imports in the first half was less pronounced than China's, with arrivals of 12.4 million tons being 8.7% lower than the 13.58 million a year earlier.
But the weakness in both China and India shows the impact of Europe's rising demand, which is pushing Asian prices higher.
A spot price above $12 per mmBtu is believed to make LNG largely uncompetitive in China's domestic market.
This means that if Europe's demand keeps Asian prices around the current levels, it is likely that buyers will hold off on spot cargoes and they may even be tempted to resell contracted volumes to the higher-priced market.
Enjoying this column? Check out Reuters Open Interest (ROI), your essential new source for global financial commentary. ROI delivers thought-provoking, data-driven analysis of everything from swap rates to soybeans. Markets are moving faster than ever. ROI can help you keep up. Follow ROI on LinkedIn and X.
The views expressed here are those of the author, a columnist for Reuters.
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