China's LNG Demand: A New Wave of Disappointment on the Horizon

According to BloombergNEF, China’s liquefied natural gas (LNG) imports are poised for another disappointing year due to lackluster industrial demand and ongoing high global prices. The forecast suggests a decline of approximately 15%, bringing total imports down to around 65 million tons in 2025. This downturn could see China relinquishing its title as the world’s largest LNG buyer to Japan.

The outlook for 2026 appears equally bleak, with analysts indicating that overall gas consumption is likely to decrease, signaling a disconnect from GDP growth trends. Previously, China was on track to reach an impressive import volume of 100 million tons by 2026; however, repeated adjustments have led experts at BNEF to revise this figure downwards significantly-now estimating demand at just 73 million tons for next year.

A surge in global LNG supply may lead to lower spot prices in the coming year and potentially encourage some additional purchases from China. However, the demand landscape remains uncertain. Key industries such as steel, glass, and cement-major consumers of LNG-are experiencing reduced activity levels. Furthermore, Beijing’s initiatives aimed at addressing overcapacity issues and ongoing trade tensions with the United States could further suppress import volumes.

Gas-fired power generation is also under pressure from competing energy sources like coal and rapidly growing renewables such as solar and wind power. As a result of rising costs associated with LNG procurement, utilization rates for gas-burning facilities have dropped into the lower range of their seasonal averages.

Chinese buyers are set to secure more long-term supply contracts starting next year; however, given the declining demand within China itself, there’s a possibility that some fuel may be redirected towards Europe where market prices remain elevated. This shift could reinforce China’s emerging role as both a trader and consumer in balancing global gas markets.

“The transition towards portfolio trading isn’t merely strategic but rather essential,” remarked Zhang Yaoyu from PetroChina International Co., during discussions at the recent BNEF Shanghai Summit.

Looking ahead, while Chinese gas consumption is supported by plans for expanding import terminal capacities-which could potentially double by 2030-the actual utilization will largely hinge on market pricing dynamics and overall demand trends.