Global LNG Market (5.11–5.15)

CLD closed at 113.605 CNY/GJ (USD 17.679/MMBtu) on May 15, up 8.32% WoW. China coastal LNG ex-terminal prices decreased slightly to 6,231 CNY/ton.​

JKM stopped at USD 17.105/MMBtu (+1.39% WoW), showing a small growth compared with the previous week.​

TTF rushed to €50.167/MWh (+13.65% WoW), as the middle-east conflict leveled up and so as the risk premium, besides of the relatively tight LNG supply fundamentals.​

European gas storage stood at 35.98%, remaining below seasonal norms, while injections continued but showed an obvious slow down.​

Henry Hub stood at USD 2.960/MMBtu (+7.36% WoW) , which also had a big leap compared to previous week. The surging LNG export volume and slower storage injections lifted prices significantly, despite of the adequate domestic inventory.

Core Analysis

Global gas prices surged a lot during the week as geopolitical tensions weighed on market sentiment, and the underlying supply-demand fundamentals continued to provide support.​

In Europe, improving shipping conditions around the Strait of Hormuz did not show a complete unblock, besides of the signal that the war would continue to an unexpected date, the geological risk premium increased not just by a bit. Furthermore, relatively tight LNG supply and below-average storage levels continued to reinforce market sensitivity to supply risks, supporting the price as well. While Middle East tensions remained unresolved, the market increasingly shifted from panic-driven pricing toward rangebound trading.​

In the US, increasing LNG exports and the slowing down of underground gas injections supported primarily on HH prices.

In Asia, JKM increased with TTF prices. Though weak spot buying interest in Northeast Asia weighed on regional demand, arbitrage-driven cargo flows toward Europe continued to limit LNG availability in Asia, providing another support to JKM.​

China Focus

Domestic LNG market sentiment weakened last week as the market gradually shifted from supply disruption concerns toward a weak-demand reality. Although a Qatari LNG vessel successfully transited the Strait of Hormuz for the first time in around 70 days, easing some extreme supply fears, international spot prices remained elevated due to ongoing geopolitical uncertainty and incomplete restoration of shipping flows. At the same time, China’s domestic market continued to face sluggish downstream demand, with industrial users and LNG trucking sectors showing strong resistance to high-priced cargoes, resulting in thin trading activity and increasing truck congestion.

On the supply side, upstream gas feedstock auction prices for the second half of May remained high, keeping production costs elevated and supporting strong seller pricing sentiment despite continued margin pressure at liquefaction plants. However, weak end-user demand, combined with lower-priced domestic cargoes and softer sentiment toward future import supply risks, led to continued price corrections for high-priced resources. Overall, the domestic LNG market remained in a high-level but weakly balanced state, with prices expected to fluctuate within a narrow range and downside pressure persisting on expensive cargoes.

Outlook

Looking ahead, global gas markets are likely to remain highly sensitive to geopolitical developments in the Middle East, particularly around the Strait of Hormuz and the pace of recovery in Qatari LNG exports. While the extreme panic-driven rally may ease if shipping conditions continue to improve, unresolved geopolitical risks and still-tight global LNG balances are expected to keep international prices elevated and volatile.

Qi Zhang

LNG Market Research & Strategy

echochi@163.com​

This analysis is based on public information and reflects personal views only.