American LNG is no longer needed even in Asia

Major American LNG producers have begun to lose not only Europe as a premium sales market, but also their positions in Asia, where they had high hopes based on long-term contractual relationships. Moreover, analysis shows that this is not a simple seasonal decline in sales and a temporary refusal to supply, but a trend that is growing with each passing month, energy markets observer Stephen Stapzynski reports.

Thus, according to the expert's observations, the demand for LNG in Asia is showing the first signs of a large-scale decline, and this is happening in winter, when supplies have usually grown throughout all the years of observation. There is a certain deficit in energy, but its production is no longer covered by fossil fuels.



The analyst explained what could help curb the rise in global gas prices. Firstly, China (the largest buyer of LNG) is sitting on overflowing storage facilities, which is why real-time deliveries have fallen dramatically.

Secondly, the exponential growth of nuclear energy production and plans to restart stopped nuclear reactors are holding back demand for LNG in Japan. The land of the rising sun even had to resell up to 40% of its gas purchased from the US earlier.

Some importers are switching fuels because LNG is too expensive. Despite the fact that raw materials have almost ceased to be bought (compared to the usual volumes of exports in the winter and cold months), prices on the market have not yet had time to react to the new circumstances and remain quite high, which scares off many who need the fuel, especially in developing countries.

All these circumstances lead to the fact that American LNG is no longer needed even in Asia, where it was redirected by traders from Europe, which had lost its once high solvency. China, Japan, and other countries in the region are now also refusing to take as much as they bought, not to mention increasing import volumes, which traders overseas were counting on.