Asian LNG Demand Outpaces Supply as March Deliveries Lag Amid Global Shortage

Asian buyers are struggling to finalize March LNG deliveries as global supply fails to meet rising regional demand, according to market participants. Despite strong purchasing interest from key importers, available cargoes have dwindled, with only 12 confirmed shipments scheduled for Asia in the month—down from an average of 18 during the same period last year. This shortfall reflects broader constraints in liquefaction capacity and shipping availability, particularly from the United States and Qatar, which together account for over 60% of global LNG exports. The imbalance has triggered upward pressure on spot prices across the region. Japan's prompt-month LNG price has surged to $17.80 per million British thermal units (MMBtu), a 22% increase from February, while South Korea's spot prices reached $18.15 MMBtu—above the $15.50 benchmark seen in early 2025. China’s importers have also reported delays in securing new contracts, with some opting to reroute vessels from Europe to Asia, adding logistics costs and increasing market volatility. The tightening supply chain comes amid a seasonal spike in energy demand, driven by colder winter conditions and increased industrial activity. In Japan, power demand rose 8% in March compared to the previous year, with utilities relying more heavily on gas-fired generation due to reduced hydro and nuclear output. South Korea’s LNG inventories have dipped to 58% of capacity, the lowest level since 2022, raising concerns over winter readiness. Meanwhile, China’s gas imports in February declined by 12% year-on-year, signaling potential strain on domestic supply chains. Market participants warn that the mismatch between demand and supply could persist through Q2, especially if U.S. export terminals face maintenance delays or if geopolitical tensions disrupt shipments from the Middle East. This scenario may further elevate prices for CL=F and NG=F, with longer-term implications for inflation and energy planning in Asia’s largest economies.