Blame for the decline can largely be attributed to China, the world’s biggest LNG importer, where volumes have slipped this year amid high spot prices that have rendered LNG uncompetitive against domestic output and natural gas supplied via pipelines from central Asia and Russia.
| Photo Credit: Reuters

Asia’s imports of liquefied natural gas stagnated in May while Europe’s continued to ease as demand in both of the world’s top-importing regions entered the seasonal slump between winter and summer peaks.

Imports of the super-chilled fuel to Asia are on track to reach 22.53 million metric tons in May, up from 21.89 million in April, according to data compiled by commodity analysts Kpler.

However, it’s worth noting that this actually represents a small drop on a per day basis, with May’s 727,000 tons fractionally less than April’s 730,000.

Compared to the year earlier month, Asia’s arrivals are down 4.5%, continuing the pattern of softer demand seen so far in 2025.

For the first five months of the year Asia imported 112.45 million tons of Liquefied Natural Gas (LNG), down 6.2% from the 119.83 million for the same period in 2024.

Blame for the decline can largely be attributed to China, the world’s biggest LNG importer, where volumes have slipped this year amid high spot prices that have rendered LNG uncompetitive against domestic output and natural gas supplied via pipelines from central Asia and Russia.

China’s LNG imports are expected to drop to 4.61 million tons in May, down from 4.86 million in April, and the weakest on a per day basis since March 2020, according to Kpler data.

The spot price of LNG in Asia declined from its mid-February peak of $16.50 per million British thermal units (mmBtu) to $11, the lowest in a year, on May 2.

But even this drop wasn’t enough to renew Chinese buying interest, with any price above $10 per mmBtu believed to make spot purchases uneconomic.

The spot price has also rallied since the early low in May, reaching $12.40 per mmBtu in the week to May 23, with the higher prices likely to weigh on future Chinese demand.

With China’s appetite limited, the question is why is the spot price rising, and it may be driven more by supply than demand.

Shipments from top regional supplier Australia dropped to a three-month low of 6.61 million tons in May amid a reported outage at a major plant, while Malaysia’s exports slid to a nine-month low of 1.71 million tons in May.

Markets were also buoyed by reports that Egypt is seeking 40-60 LNG cargoes for the upcoming northern summer amid an energy crunch, which would likely suck some LNG away from Asian markets, especially from Middle East producers like Qatar and the United Arab Emirates.

Europe trims

European LNG demand continued to ease in May, dropping to 9.91 million tons from 10.37 million in April, according to Kpler data.

Europe’s intake has been dropping since reaching a 27-month high of 12.78 million tons in March as the continent’s storages have been rebuilt after being depleted by a larger than normal amount over the winter demand period.

The United States remains Europe’s top supplier, although imports dropped to a five-month low of 5.53 million tons in May, down from 5.87 million in April.

However, the U.S. exporters have been able to switch more volumes to Asia, with Kpler tracking imports of 1.86 million tons in May, up from 1.35 million in April and the highest since December.

It’s also likely that Asia’s imports from the United States will move higher again in June, with Kpler estimating arrivals of 2.1 million tons.

Several Asian countries are seeking to buy more U.S. LNG, and other commodities such as crude oil, as part of efforts to get trade deals with the administration of the U.S. President Donald Trump.

The problem with trying to buy more from the United States is that if several countries all try it at the same time, the available supply will quickly be exhausted.

Whether buyers are prepared to pay a premium for U.S. LNG will then be an interesting geopolitical question.