LONDON, May 2 (Reuters): Prices of Asian spot liquefied natural gas (LNG) fell this week to a new one-year low on weak demand and as trade wars raise concerns over long-term Asian demand.
The average LNG price for June delivery into north-east Asia was at $11.00 per million British thermal units (mmBtu), its lowest level since mid-May 2024 and down from $11.80/mmBtu last week, industry sources estimated.
"LNG price expectations have been transformed in the last two and a half months. U.S. President Trump's tariff war is set to slow global demand, European gas storage targets are being weakened and imports into the world's biggest LNG buyer, China, have slumped," said Alex Froley, senior LNG analyst at ICIS.
China's demand remains subdued, with LNG imports down 26% in April 2025 compared to April 2024, while imports for January-April this year were down 23% from the year before, Froley said.
Toby Copson, chairman at Davenport Energy Partners, said that there was very little fundamental demand in the East for spot cargoes, and utilities aren't stepping in yet to cover cooling demand.
"Sentiment is negative. I don't see a floor yet. If price- sensitive nations start picking up attractive lower prices, we might see rates stabilize. However, trade wars create demand destruction, and there is plenty of supply available," Copson added.
Trade tensions continue to weigh on the outlook for LNG demand this year especially from Asia, with China re-exporting record volumes of LNG in April, said Rabobank energy strategist Florence Schmit.
In South Korea, buyers are seeking cargoes to refill low storages and there has also been stronger demand from Indian buyers due to low price levels, said Martin Senior, Argus' head of LNG pricing.
In Europe, north-west European delivered prices fell, mostly because of new regulations from the German government reducing its own national gas storage targets for this winter to 70% from the existing 90%. This has reduced summer demand expectations, Senior added.
Rabobank's Schmit said that the weakness in Asia would help ease supply tightness for Europe during the summer injection season, adding that threats of tougher U.S. sanctions on Russia's energy sector and EU's plans to phase out Russian gas remain bullish risks for gas markets.
S&P Global Commodity Insights assessed its daily North West Europe LNG Marker (NWM) price benchmark for cargoes delivered in June on an ex-ship (DES) basis at $9.78/mmBtu on May 1, a $0.75/mmBtu discount to the June gas price at the Dutch TTF hub.
Argus assessed the price for June delivery at $9.860/mmBtu, while Spark Commodities assessed it at $9.969/mmBtu.
The US arbitrage to north-east Asia via the Cape of Good Hope remains closed while the arbitrage via Panama continues to marginally point to Asia, said Spark Commodities analyst Qasim Afghan.
In the LNG freight market, Atlantic rates rose for the second week to $40,750/day on Friday, while Pacific rates remained flat at $22,550/day, Afghan added.
