China's liquefied natural gas (LNG) imports in September 2023 will reach 5.3 million tons, indicating an 8 percent decrease compared to the country's imports in September 2022. According to Kpler data, this amount is slightly higher than the 5.2 million tons imported in August.
Reasons for the Decrease in LNG Imports
The main reason for this decrease is the rise in prices in the global market, particularly influenced by the war in the Middle East. LNG prices in spot markets reached over $20 per million BTU in August and increased to $26 per million BTU in early September. This price increase is nearly double last year's prices and has reduced the willingness of other Asian importers to purchase LNG.
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Kpler's Forecast for the Asian Market
Kpler has predicted that total Asian LNG imports in September 2023 will reach the lowest level in at least eight years, decreasing to 20.09 million tons, while this figure was 22.27 million tons in September last year. This decrease indicates a shift in China's purchasing trend, which had been steadily increasing LNG purchases since May 2023.
China, one of the largest LNG buyers in the world, is currently working to secure LNG supplies from exporters not reliant on the Strait of Hormuz. The country is seeking to reduce its dependence on gas deliveries from the Persian Gulf. Despite these efforts, China is not looking to cancel its contracts with Qatar but is exploring options to reduce its reliance on gas supplies from this region.
Qatar has also recently extended its force majeure period on LNG exports, which could lead to prolonged price increases. This price rise is clearly evident ahead of the heating season in the Northern Hemisphere and will increase demand for liquefied natural gas.
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