Asian Gas Falls to One-Year Low as Trade War Stokes Demand Fears

(Bloomberg) — Asian liquefied natural gas prices dropped to their lowest in almost a year as a global trade war threatened to hit the region’s biggest economies and slow demand for the fuel.

The Japan-Korea LNG benchmark for North Asia fell to about $11.27 per million British thermal units on Monday, the lowest since May 2024, according to traders, citing S&P Global’s price assessment. 

An escalation in the trade war could curb economic growth and further sap consumption of the super-chilled fuel in top consumer China, where imports have dropped due to high prices and more affordable alternatives, as well as mild winter weather and strong inventories. Trump has threatened to slap an additional 50% import tax on Chinese goods, on top of a 34% duty set to start on Thursday and a 20% levy put in place earlier.

“The trade war is contributing to downward pressure on LNG and gas prices due to reduced demand from China and increased market uncertainty,” said Alex Siow, lead LNG analyst at pricing agency ICIS. 

Still, the drop in LNG prices may be short-lived. Buyers in China, India and other Asian emerging nations may move to procure more fuel to take advantage of the selloff, especially ahead of hotter summer weather.

More News:

• Santos is offering an LNG cargo on a DES basis for 1H June delivery to North Asia
• Indian Oil Corp. re-released a tender seeking to purchase an LNG cargo on a DES basis for April 23 to May 4 delivery to the Ennore terminal
• HPCL bought an LNG cargo on a DES basis for April to early-May delivery to India in the mid-$11/mmbtu range
• Argentina’s Enarsa is looking to buy seven cargoes for June and one cargo for July in its next import tender

Drivers: 

• India’s LNG demand will see a sharp increase in May as rising temperatures will boost the demand for power, Petronet LNG Chief Executive Office Akshay Kumar Singh said Tuesday
• Indonesia President Prabowo Subianto ordered his cabinet to import a larger portion of LPG and LNG from the US as part of negotiations on US tariffs, says Coordinating Economic Minister Airlangga Hartarto in a meeting with business leaders in Jakarta on Tuesday
• Estimated flows to all US export terminals were ~15.9 bcf/day on April 7, +1.8% w/w: BNEF
• China’s 30-day moving average for LNG imports was 137k tons/day on April 6, 31.5% lower than this time last year, according to ship-tracking data compiled by Bloomberg
• European gas storage levels were ~35% full on April 6, compared with the five-year seasonal average of ~46%

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