China’s Fuel Oversupply Keeps LNG Imports Subdued Through Winter

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(Bloomberg) — Chinese demand for seaborne gas is poised to remain tepid through the winter, as ample supplies blunt the usual surge in consumption at the end of the year.

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Imports of liquefied natural gas plunged 15% year-on-year in September, an 11th straight monthly decline. They’ve fallen 17% over 2025 so far, replaced by cheaper fuel arriving via pipeline or produced locally, and an abundance of other power sources like coal, solar and hydro.

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A poor winter for LNG demand could come with a silver lining, however, if it gives importers the upper hand in price negotiations with squeezed producers down the line, according to analysts and executives, who spoke on condition of anonymity when discussing commercial matters.

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That could help put the industry on a more sustainable path, the people said, at a time when the global market is becoming increasingly oversupplied and China is still building import capacity.

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The National Energy Administration expects the world’s biggest consumer of the fuel to record its slowest-ever demand growth of just 2%-3% this year. All of that will be met by the increased volumes being drilled domestically, or piped overland from Russia and Central Asia, the people said.

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Economic Slowdown

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China’s slowing economy is an obvious drag on consumption. And while cold snaps over the winter are always a risk to heating-fuel supplies, this year’s La Nina weather pattern is quite weak and may not be enough to disturb the general trend of rising temperatures.

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Geopolitics are also playing a role. Major Chinese buyers have restocked their LNG tanks to as much as 80% of capacity to lessen competition for cargoes with a volatile European market over the winter, the people said. 

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Although China continues to take sanctioned Russian gas, the curbs are contributing to risk aversion among importers. Other factors, including potential instability on sea lanes in the Middle East and worsening trade relations with the US, are causing buyers to depend less on last-minute purchases from the spot market, the people said.

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China has invested too much in LNG to let the market wither, though. Gas is viewed as an important backstop to intermittent renewables, and the industry has lobbied the government to dramatically raise the number of power plants that run on the fuel in the next five-year plan. 

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Helped by structurally lower prices, LNG would be part of that expansion. Import facilities could rise to 250 million tons a year by 2030, from 150 million tons currently, the people said.

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On the Wire

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