In October 2024, LNG import volume slid MOM but saw high YOY growth. The average import price increased both MOM and YOY, and the theoretical arbitrage space weakened. It is anticipated that LNG import volume in November will rise MOM due to seasonal demand.

Volume: In October 2024, China’s LNG import volume was 6.55 MMt, down 283.8 kt or 4.15% MOM and up 1.43 MMt or 28.02% YOY. From January to October 2024, China’s total LNG import volume was 63.64 MMt, an increase of 7.48 MMt or 13.32% YOY.

According to SCI’s AIS monitoring, China received approximately 6.33 million tons of LNG imports in 98 cargoes in October 2024, down 8.53% M-O-M and up 22.46% Y-O-Y. Please note that there are differences between the AIS data and customs data that may be caused by the pre-clearance or delayed clearance documented progress, free-bond cargo clearance, historical data backtrace and revision, etc.

Looking at historical patterns, the LNG import volume in October tends to show a MOM decline from 2016 to 2023 except in 2017 and 2018. In the past years, the MOM decline in LNG import volume was mainly due to the transition from the traditional off season to the peak season, when gas suppliers had been well-prepared. This October, the pickup in industrial demand amid a traditional peak season failed to offset the curtailment in LNG replenishment demand caused by sufficient inventory in terminals and UGS.

Price: The average LNG import price in October 2024 was $593.02/mt, up $10.67/mt or 1.83% MOM, and up $24.98/mt or 4.4% YOY.

LNG import prices headed up in October mainly following buoyant contracted LNG prices. Contracted prices were more linked to JCC, which showed a downtrend from May 2024.

In addition, the average theoretical arbitrage space for trucked LNG from terminals was RMB 445/mt in October, a MOM decrease of RMB 249/mt or 36% and a YOY decrease of RMB 47/mt or 10%. Import arbitrage in October slid, mainly coming after declines in ex-terminal prices and rises in import cost. In October, domestic LNG ex-terminal prices slid by RMB 156.13/mt or 2.94% MOM to RMB 5,215/mt. The declines in ex-terminal prices were mainly in tandem with lower ex-plant prices combined with fierce competition between tier-2 and tier-3 players.

Forecast

Volume: The seasonal demand due to the kick-off of the heating season will continue to boost LNG import in November.

This November, the overall temperature was first warm and then turned cold. The temperature in most parts in H1 November was the highest in the history of the same period. Starting from mid-November, China was hit by a cold wave especially from November 23 to 27. The temperature generally dropped by 6-10 degrees. It is expected that the LNG import volume this November will rise YOY, which will be consistent with the historical performance. In addition, the high YOY growth will likely persist, owing to the new and expanded projects of the terminals in the year.

Price: It is expected that the comprehensive LNG import price in November will inch down MOM, mainly in line with the trend in contracted LNG price. High spot LNG prices have subdued the buying interest, indicating that the share of spot LNG will be small of the total LNG. The contracted LNG import price in November will decline marginally MOM, as the international crude oil pricing cycle remains in a downtrend.