China’s Domestic LNG Prices Hit Multi-Year Low Amid Weak Demand, Rising Stockpiles

China’s domestic liquefied natural gas (LNG) prices have fallen to their lowest level in years, as rising inventories coincide with weaker-than-expected winter heating demand.

Wholesale domestic LNG prices at major Chinese import terminals dipped below 3,500 yuan per ton (approximately $10.72 per million British thermal units) this week, marking their lowest point since mid-2021, according to data from SCI99, a Chinese commodity pricing agency.

Gas Demand Dynamics

This decline represents a significant departure from typical winter trends, when prices usually climb due to increased heating demand. However, unusually mild temperatures this year, coupled with a faltering industrial and economic recovery across China, have pushed domestic LNG prices further down.

Simultaneously, inventories have swelled. Seaborne LNG shipments to China began to recover in November after a year-long decline, though cumulative volumes remain below last year’s levels. Pipeline gas imports also continued their upward trend, official customs data showed.

SCI99 reported that terminal operators have been compelled to offload inventory at reduced prices, with storage tanks reaching 73% capacity as of December 19. For more on China’s LNG market, see Bloomberg’s report on China’s LNG imports.

Wang Ran, an analyst at SCI99, noted in a memo that “prices may remain low throughout this month.”