China's LNG buyers sit out winter spot market amid ample supply, weak demand

Chinese LNG importers are largely sitting out of the Asian LNG spot market as robust domestic production, rising pipeline gas supplies, and ample storage ease the need for extra shipments despite the approaching winter season, according to trade sources and industry analysts.

China is expected to minimize spot purchases through the coming winter, reducing exposure to volatile short-term markets, trade sources said, speaking on the condition of anonymity because they are not permitted to do so on the record.

"We have not heard any plans for winter LNG procurement from Chinese suppliers, as current domestic supplies are adequate. Typically, the process would have been initiated by now, but it is delayed this year," a trade source from one of China's national oil companies said.

China's gas supply landscape has been transformed in 2025 thanks to higher domestic production and increased pipeline deliveries. Domestic production reached 173.7 Bcm in January-August 2025, a year-over-year increase of 6.1%, according to data from the National Bureau of Statistics. This increase has already met the National Energy Administration's full-year growth forecast.

Furthermore, pipeline gas imports are surging, with flows from Russia's Power of Siberia pipeline expected to rise by 29% this year to nearly 39 Bcm, according to forecasts from S&P Global Energy. China's total pipeline gas imports are estimated to reach 84.6 Bcm in 2025, up 11% from last year.

In addition, sanctioned Russian tankers continue to arrive at the Beihai terminal, with the fifth shipment departing on Sept. 17. These additional volumes have further weighed on market balances.

"With these additional supplies, no second-tier buyers in the region are expected to import spot cargoes for the winter, except for a few northern Chinese importers who have the task of ensuring supply security," a southern China-based trade source said.

Storage levels

Storage levels remain elevated at 70%-80% of capacity, reducing the urgency for winter restocking. "Inventory levels in China are currently high, and replenishment will depend solely on whether the winter proves to be harsh," a northern China source noted.

A colder-than-average winter could temporarily boost consumption. But even in this scenario, China's high inventory and expanded storage capacity are seen providing a substantial buffer.

According to a PetroChina report Sept. 10, multiple gas storage clusters under its management, such as the Liaohe Oilfield gas storage cluster -- the largest gas storage cluster in China --the Changqing Oilfield gas storage cluster, and the Huitu River gas storage cluster in Xinjiang, have completed over 80%, 78%, and 93% of their gas injection tasks for this year, respectively.

Additionally, with the commissioning of multiple new gas storage facilities, it is estimated that the working capacity of China's underground gas storage will reach about 31-32 Bcm in 2025, an increase of around 5 Bcm from last year, according to data from Energy.

The supply glut in the Chinese market has also pressured domestic trucked LNG prices, making Asian spot LNG unattractive economically, according to trade sources.

"Currently, we can't buy spot LNG at all, even for December. It's too risky. We would prefer to purchase domestic gas," an eastern China source said.

Trucked LNG prices from some inland LNG liquefaction plants are currently reported at only Yuan 3,700-3,800/mt, which is equivalent to around $10/MMBtu, according to calculations from Platts, part of Energy. Platts assessed the November JKM at $11.659/MMBtu on Sept. 17.

Market participants expect that the average trucked LNG prices in China will be around Yuan 4,300-4,500/mt this winter, below the Yuan 5,000-6,000/mt levels seen in previous winters.

Structural demand

Beyond temporary supply-demand imbalances, fundamental structural changes are also reshaping China's gas market.

The National Energy Administration projects just 2-3% gas consumption growth in 2025, down from 8% in 2024 and well below supply growth rates. This slowdown reflects broader economic transformations as growth shifts from energy-intensive industries toward technology and advanced manufacturing.

In addition, renewable energy expansion is accelerating, with wind and solar accounting for over 85% of the 325 GW of new power generation capacity added in January-July 2025.

"The rise of renewable energy is reducing the space for gas-fired power generation, increasing downward risks for future gas demand," said Huang Tianshi, associate director for China Gas and LNG at Energy.

Demand from LNG heavy-duty trucks is also weakening, as sales fell 17% year-on-year in January-July, while electric alternatives surged by 191%.