China’s liquefied natural gas (LNG) imports fell to a five-year low last month as weak domestic demand and higher prices in Europe diverted shipments away from the world’s second-largest economy.
According to data from commodities analytics firm Kpler, China imported 4.5 million tons of LNG in February, marking its lowest level since early 2020. This downturn also resulted in China falling behind Japan as the world’s largest LNG importer for the second consecutive month.
The decline underscores several key factors at play in China’s energy market, including unseasonably warm winter temperatures, high storage levels, and sluggish industrial consumption. At the same time, Chinese traders have been capitalizing on the opportunity to resell LNG cargoes to Europe, where higher prices offer a more lucrative market.
A primary driver behind China’s reduced LNG imports has been its relatively mild winter, which has lessened the need for additional heating demand. Wei Xiong, head of China gas research at Rystad Energy, highlighted that “ample supplies in storage and low industrial demand” have kept import levels suppressed.
“The brimming inventories are likely to continue to weigh on imports through the end of the heating season,” Xiong said.
China’s natural gas demand typically peaks during the winter months as homes and businesses rely more on heating. However, the 2024-2025 winter season has been notably warmer than usual, reducing the country’s immediate need for LNG. As a result, domestic stockpiles have remained high, further dampening the need for new shipments.
This trend is not unique to China. Other major LNG-consuming nations in Asia, including South Korea and Japan, have also experienced milder weather, limiting their demand for natural gas.
With China’s LNG imports declining, Japan has reclaimed the title of the world’s largest LNG importer. This shift marks a reversal from recent years, where China had surpassed Japan as the top buyer due to its rapid industrial expansion and growing energy needs.
Japan’s LNG demand has remained relatively stable, with power generators relying on gas imports to supplement electricity production amid a slow revival of the country’s nuclear power sector. In contrast, China’s economic slowdown and shifting energy priorities have contributed to a pullback in LNG purchases.
China’s reduced import levels have also had implications for global LNG trade flows. Cargoes that would have traditionally headed to Chinese ports are instead being redirected to Europe, where demand remains robust amid ongoing energy security concerns.
One of the notable trends in China’s LNG market over the past few months has been the increased reselling of LNG cargoes to overseas buyers, particularly in Europe.
Chinese gas firms, which secured LNG shipments under long-term contracts or through spot market purchases, have been offloading their surplus supplies to take advantage of more attractive pricing abroad. This arbitrage strategy has allowed companies to profit from the price differential between Asia and Europe, where LNG demand remains strong amid geopolitical uncertainties and the transition away from Russian pipeline gas.
According to Xiong, this reselling activity is expected to remain high throughout 2025, especially in light of the 15% tariff imposed by China on U.S. LNG imports. The tariff, introduced as part of ongoing trade tensions between Beijing and Washington, makes American LNG less competitive for Chinese buyers, further encouraging them to seek alternative markets for their excess supply.
“Chinese companies are likely to continue prioritizing sales to Europe, where demand and pricing conditions are more favorable,” Xiong said.
China’s decision to impose a 15% tariff on U.S. LNG shipments is expected to have lasting effects on trade flows between the two countries. The move comes amid a broader geopolitical rift between Beijing and Washington, with energy trade becoming a focal point in their strained relationship.
The tariff effectively raises the cost of American LNG for Chinese buyers, making it less attractive compared to supplies from other regions, such as Qatar, Australia, and Russia. As a result, China is likely to shift its LNG procurement strategy away from the U.S., redirecting purchases to other global suppliers.
For U.S. LNG producers, the tariff presents a challenge, as China had previously been a key growth market. However, with European buyers stepping in to absorb surplus American cargoes, the overall impact on U.S. exporters may be mitigated in the short term.
China’s declining LNG imports also reflect broader shifts in its energy strategy. As part of its commitment to reducing carbon emissions and enhancing energy security, Beijing has been ramping up investments in renewable energy sources such as wind, solar, and hydroelectric power.
At the same time, the country is prioritizing the development of domestic natural gas production and expanding its pipeline infrastructure to reduce reliance on costly LNG imports. China has significantly increased pipeline gas imports from Russia via the Power of Siberia pipeline, which offers a more stable and cost-effective supply compared to seaborne LNG shipments.
These factors suggest that while LNG will continue to play a role in China’s energy mix, its growth trajectory may be more tempered compared to previous years.
China’s lower LNG demand has broader implications for the global LNG market. As the world’s largest energy consumer, any fluctuation in China’s import levels can influence global pricing dynamics and trade patterns.
The redirection of LNG cargoes from China to Europe has contributed to higher supply availability in the European market, helping to stabilize prices and ensure energy security. However, should China’s demand pick up later in the year—potentially due to economic recovery or a hotter-than-expected summer—competition for LNG supplies could intensify, pushing prices higher.
For LNG producers and traders, the current market environment underscores the importance of flexibility and strategic positioning. With geopolitical tensions, evolving trade policies, and shifting demand patterns shaping the landscape, stakeholders in the LNG industry must remain agile in responding to changing market conditions.
China’s LNG imports have hit a five-year low, driven by weak domestic demand, ample storage levels, and higher European prices that have attracted cargoes away from Asia. The country has fallen behind Japan as the world’s largest LNG importer, signaling a shift in global energy trade flows.
With Chinese gas firms actively reselling LNG cargoes and a 15% tariff on U.S. imports influencing purchasing decisions, the country’s role in the global LNG market is evolving. As China continues its energy transition and diversifies its gas supply sources, the long-term outlook for LNG imports remains uncertain.
Meanwhile, the global LNG market is adjusting to these changes, with European buyers benefiting from increased supply availability. How China’s demand trends develop in the coming months will be closely watched by traders, producers, and policymakers alike, as they navigate an increasingly complex and interconnected energy landscape.
