Liquefied Natural Gas (LNG) Commodity Market Dynamics Report — Recent Intelligence

I. Price Dynamics
1. Domestic Prices
- As of May 27, 2026, the Business Network’s benchmark LNG price stood at RMB 4,128.00 per ton, down 3.37% from the beginning-of-month level of RMB 4,272.00 per ton and down 1.48% on a daily basis—reaching a one-year low.
- In early May 2026, LNG prices were reported at RMB 6,328.1 per ton, up 12.3% month-on-month—the highest growth rate among all monitored commodities.
- For May 2026, the national average ex-factory (or ex-station) LNG price is projected to range between RMB 6,300–6,450 per ton; imported LNG bulk ex-station prices are expected to average RMB 6,450–6,550 per ton, while domestic liquefaction plant ex-factory prices are forecast at RMB 6,250–6,400 per ton.

2. International Prices
- In May 2026, the Northeast Asia LNG spot delivery price averaged approximately USD 19.067 per million British thermal units (MMBtu), translating—after inclusion of import duties and regasification terminal processing fees—to an estimated landed cost of around RMB 7,330.9 per ton, a sharp increase of RMB 1,038.1 per ton compared to April.

II. Supply-Demand Dynamics
1. Supply Situation
- Domestic Supply: Total domestic LNG liquid supply in May 2026 is projected at approximately 5.46 billion cubic meters (bcm), averaging 176 million cubic meters per day (mcm/d), representing a marginal 0.1% decrease month-on-month. Overall supply remains relatively tight, exhibiting a bifurcated pattern of “increasing imports, decreasing domestic production.”
- Imports: The number of LNG vessels arriving at Chinese ports in May 2026 is expected to rise by nine ships compared to April. Total imported LNG volume via truck loading is forecast at 1.51 bcm, averaging 49 million cubic meters per day—a 6.7% increase month-on-month.
- Domestic Production: Constrained by tightening feed gas supply from PetroChina and entering the industry’s traditional off-season, several domestic LNG plants have scheduled periodic maintenance shutdowns. Consequently, total domestic LNG output in May 2026 is projected at ~3.95 bcm, averaging 127 million cubic meters per day—a 2.5% decline month-on-month.
- Global Supply: At least 35 million tons per year of new global LNG liquefaction capacity is expected to come online in 2026, primarily from the U.S. and Qatar. Global LNG supply is projected to reach 460–484 million tons annually, with potential year-on-year growth as high as 10%.

2. Demand Situation
- Domestic Demand: Overall LNG demand in China during May 2026 is expected to remain stable with modest growth. Demand across sub-sectors provides layered support; however, elevated gas prices constrain the pace of growth.
- Transportation Sector: LNG-powered heavy-duty trucking demand remains robust, supported by a rational diesel-to-LNG price spread, effectively underpinning baseline demand for vehicle fuel.
- City Gas Distribution: Regional pipeline gas shortages may trigger phased demand releases; city gas utilities are expected to procure small volumes of LNG for inventory top-ups in mid-to-late May.
- Power Generation: With rising ambient temperatures, gas-fired power demand in East and South China enters its seasonal uptick. However, persistently high LNG prices compel downstream users to prioritize pipeline gas consumption and adopt a cautious, need-based, price-sensitive procurement strategy for LNG.
- Global Demand: Asian LNG demand in 2026 is projected to grow by 4%–7%, with India serving as a primary growth driver. European LNG imports are anticipated to increase by 22 million tons, reaching approximately 145 million tons.

III. Key Market Influencing Factors
1. Geopolitical Factors: The Middle East geopolitical conflict that erupted in early 2026 has inflicted physical damage on the global LNG supply chain: navigation capacity through the Strait of Hormuz has been impaired, and key liquefaction facilities in core producing regions have sustained material damage—temporarily taking roughly 20% of global LNG supply capacity offline and pushing up spot trading prices.
2. Cost Factors: Sustained high international LNG spot prices significantly elevate landed costs for imported LNG, forming the principal upward support for domestic LNG pricing.
3. Policy Factors: Under China’s “Dual Carbon” (carbon peak & carbon neutrality) goals, natural gas—as a low-carbon fossil fuel—occupies a pivotal transitional role in the energy transition. Strong policy support fosters optimization of the energy consumption structure and reduction of greenhouse gas emissions, thereby providing a favorable policy environment and market opportunity for the LNG industry.

IV. Market Analysis & Outlook
1. Short-Term Outlook: Throughout May 2026, China’s LNG market will be jointly driven by three core factors—persistently tight supply, steady yet moderate demand growth, and resiliently high cost structures. The fundamental market dynamics are strengthening, with clear and robust upside price logic. The market is expected to maintain a high-level, resilient, and range-bound upward trajectory throughout the month.
2. Long-Term Outlook: As new global LNG liquefaction capacities progressively come online, supply conditions will shift from tightness toward relative abundance, ushering the global LNG market into a new “buyer’s market” phase—leading to downward pressure on prices. However, lower prices will stimulate increased purchases by major importing countries in Asia, while Europe is expected to replenish inventories during this low-price window ahead of next winter’s heating season, thereby delivering modest demand uplift.

V. Forecasts
1. Price Forecast: Domestically, LNG prices will remain resilient and elevated in the near term; over the longer horizon, prices are expected to trend downward as new global supply capacities are commissioned.
2. Supply-Demand Forecast: Domestic LNG supply will gradually ease, potentially reducing import dependency; demand will rise steadily, with LNG’s share in the overall energy mix stabilizing. Sub-sector demand growth rates are projected to rank as follows: transportation > industrial > power generation > city gas.