Asia's LNG imports stay soft in July as Europe draws cargoes
Asia's imports of LNG are estimated at 22.07 million tonnes in July, up from 21.80 million in June, according to data compiled by commodity analysts Kpler. On a per-day basis July's figure is 722,000 tonnes, which is slightly down from 727,000 in June.
The soft July imports continue a trend this year of declining LNG arrivals in Asia, with the first seven months of this year coming in at 155.82 million tonnes, down 6.3% from the 166.22 million over the same period last year.
In contrast to Asia's declining LNG imports, Europe's have been trending higher, with the first seven months seeing arrivals of 75.61 million tonnes, up 24% from the 61.13 million for the same period last year, according to Kpler data.
The extra 14.48 million tonnes of LNG headed to Europe in the first seven months reflects the continent's efforts to refill inventories ahead of winter while continuing to shun pipeline gas from Russia.
The extra European demand has been a boon for LNG exporters as it has helped keep global prices higher, and largely prevented the usual seasonal decline in both volumes and spot prices seen in the shoulder season between the winter and summer peaks.
But the higher prices have also led to lower demand from price-sensitive buyers in Asia, especially China, the world's largest LNG importer.
China's LNG imports are on track to reach 4.96 million tonnes in July, down from 5.09 million in June and 5.92 million in July 2024, according to Kpler data. For the first seven months of the year, China's imports are estimated by Kpler at 35.17 million tonnes, down 21.2% from the 44.64 million for the same period last year.
The drop in China's LNG imports also accounts for 91% of the total drop in Asia's imports in the first seven months this year.
The rest of the decline can largely be ascribed to India, Asia's fourth-largest LNG buyer, with imports in the January to July period estimated at 14.08 million tonnes, down from 16.11 million for the same period last year.
The decline in imports by China and India comes as spot LNG prices for delivery to North Asia remain at elevated levels.
The spot price dropped to US$12.33 per million British thermal units (mmBtu) in the week to July 14 from US$12.90 the prior week.
While this is similar to the US$12 per mmBtu that prevailed in the same week last year, what is different so far this year is that the lowest price so far, of US$11 in late April, is well above the low point of US$8.30 in February 2024 and US$9 in June 2023.
The fact that spot prices didn't have their usual seasonal decline after the northern winter meant that Chinese buyers were unable to pick up cargoes at economical prices. — Reuters
Clyde Russell is a columnist for Reuters. The views expressed here are the writer's own.
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