I. Review of China's LNG Market Price Trends in 2025

In 2025, domestic LNG prices exhibited a fluctuating downward trend, with overall volatility significantly narrowing and traditional seasonal price patterns largely disappearing. Supply-demand conditions remained notably relaxed throughout the year. Domestic gas and pipeline gas supplies grew steadily, while total imported LNG volumes declined. However, diversified supply sources intensified market competition. Combined with persistent weak demand and the disappearance of seasonal patterns, the market entered a new normal characterized by high supply and low volatility.

By December 31, 2025, the national average LNG market price stood at 4,317 RMB/ton, a year-on-year decrease of 6.9%. The average ex-factory price for domestically produced LNG was 4,215 RMB/ton, down 8.4% year-on-year, while the average ex-terminal price for imported LNG was 4,418 RMB/ton, down 5.5% year-on-year. The price gap between domestic and imported LNG narrowed to 203 RMB/ton, turning positive at times to 201 RMB/ton.

Analyzing the phased price trends: During January-February, the Spring Festival holiday prompted liquefaction plants to significantly reduce prices before the holiday to clear inventory. Post-holiday, downstream operations resumed, and temporary cold spells boosted urban gas and downstream users' restocking at lower prices. This eased inventory pressure at liquefaction plants, with strong profit recovery motivation driving price rebounds. Subsequently, production cuts at some plants, coupled with elevated international spot prices, prompted receiving terminals to control volumes and push prices higher. multiple positive factors further propelled LNG prices upward.

However, entering March, demand declined as the heating season ended. Compounded by Sino-US trade friction, industrial and automotive demand both weakened. From March to July, downstream demand support remained persistently weak. Furthermore, new production capacity from some LNG plants came online, leading to ample supply and a clearly relaxed market supply-demand situation. Nevertheless, considering reduced supply from upstream pipeline maintenance and plant shutdowns, LNG prices overall showed a fluctuating downward trend.

From August to early October, LNG importers faced difficulties in reselling long-term contracts internationally, leading to a significant increase in imported LNG at receiving terminals. Overseas suppliers intensified promotional efforts to capture market share. However, weak terminal demand persisted due to factors like a sluggish macroeconomy, typhoon weather, the Beijing military parade, and the National Day holiday. Meanwhile, newly commissioned domestic liquefaction plants steadily increased production, intensifying supply-side competition. Furthermore, inventory pressure intensified around the National Day holiday, driving LNG prices lower under sustained downward pressure.

Although cold fronts in mid-to-late October prompted some storage facilities and city gas companies to replenish inventories at lower prices, rapidly easing high inventory pressures at liquefaction plants, and CNPC partially controlled supply volumes to push prices up, supporting a swift LNG price rebound, the actual price increase was short-lived. The market remained oversupplied, traditional seasonal patterns disappeared, Downstream buyers purchased on demand at lower prices, keeping liquefaction plant inventories persistently at medium-to-high levels. Under the dominance of market destocking pressure, LNG prices continued to show a trend of wide declines to stimulate orders. Furthermore, as the year drew to a close, CNPC and CNOOC implemented off-peak price cuts for promotional sales, further widening the market's decline. LNG prices ultimately closed at the lowest level of the year.

II. Forecast for China's LNG Market Supply, Demand, and Price Trends in 2026

China's LNG market is projected to maintain fundamentally loose supply and demand conditions in 2026, with supply growth outpacing demand growth. LNG price fluctuations are expected to narrow, predominantly oscillating at lower levels. The national average ex-factory (station) price is forecast to range between 3,950-4,050 RMB/ton, with seasonal patterns between winter and summer persisting to disappear.

On the supply side, China's total LNG supply is projected to reach approximately 68 billion cubic meters in 2026, representing a 5.1% year-on-year increase but showing a moderation in overall growth. Regarding liquefaction plants, new production capacity is expected to add 15.8 million cubic meters per day in 2026. bringing total domestic liquefaction plant capacity to approximately 220.5 million cubic meters per day. However, considering that some plants may temporarily reduce or halt production due to profitability and gas supply constraints, coupled with the phasing out of minor idle capacity, the growth in LNG production is expected to moderate in 2026. Annual output is projected to reach around 48 billion cubic meters, representing an 8.0% year-on-year increase. Regarding receiving terminals, new annual receiving capacity is projected to reach 80.05 million tons in 2026. If all projects are completed and operational, the national total receiving capacity will reach 252.02 million tons per year. However, considering the generally low utilization rate of receiving terminals and the sustained supply-demand balance in the domestic market, the actual increase in receiving capacity is expected to be restrained. Additionally, Chinese enterprises are actively signing medium-to-long-term contracts. Although the volume of long-term contracts executed in 2026 will increase significantly, and low-priced resources from Arctic 2 and Sakhalin may be exported to China in large quantities, this will partially offset the inflow of high-priced spot resources into the domestic market. Overall, it is estimated that LNG imports in 2026 may resume modest growth, but the actual increase will be relatively limited. Annual LNG imports are expected to be around 95 billion cubic meters, representing a year-on-year increase of 2%.

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