Analysis of China's LNG Price Trend (March 9–13, 2026)
From March 9 to 13, 2026, China’s domestic LNG prices exhibited a rollercoaster pattern of sharp surge followed by steep decline. The core dynamic was a classic case of “strong expectations vs. weak reality”: prices were initially driven higher by a combination of international geopolitical risks and rising domestic costs, only to fall rapidly later due to sluggish downstream demand and logistical constraints.
I. First Half of the Week: Sharp Price Surge (Core Drivers: Dual Supply-Side Tailwinds)
1. International Geopolitical Conflicts + “Functional Closure” of the Strait of Hormuz (Most Critical External Factor)
Ongoing escalation of geopolitical tensions in the Middle East brought shipping through the Strait of Hormuz to a near standstill, disrupting approximately 20% of global LNG trade. LNG exports from Qatar and other Gulf states were hit by force majeure, creating a systemic supply gap in the global market.
Market panic intensified, sending international LNG spot prices—including the Asian JKM and European TTF benchmarks—soaring. This directly lifted China’s imported LNG costs and bullish market expectations in tandem.
2. CNPC Direct-Supply Feedgas to LNG Plants: “Reduced Volume, Higher Price” (Key Domestic Cost Driver)
In mid-March, the feedgas auction for LNG plants directly supplied by China National Petroleum Corporation (CNPC) saw lower supply volumes and higher clearing prices, which directly pushed up production costs for liquefaction plants.
Rising feedgas costs formed a solid cost support, which, combined with international price hike expectations, drove domestic LNG ex-plant prices to surge rapidly.
II. Second Half of the Week: Rapid Price Decline (Core Triggers: Dual Demand-Side Pressures)
1. Low Acceptance of High Prices by Downstream Buyers, Weakening Purchasing Sentiment
As prices climbed into elevated territory, downstream users—including city gas distributors, industrial consumers, and vehicle fuel operators—saw a marked drop in willingness to purchase high-priced LNG. Restocking and inventory-building activities beyond rigid demand fell sharply, and market trading volume cooled rapidly.
2. Sluggish Logistics and Industrial Demand in North China During the “Two Sessions” (Direct Catalyst)
North China is one of China’s core LNG consumption regions. During the “Two Sessions” period, stricter logistics and transportation controls and a temporary slowdown in industrial production further weakened terminal LNG demand.
The stark contrast between weak demand reality and earlier bullish expectations shifted market sentiment from “panic buying” to “wait-and-see,” putting heavy downward pressure on prices.
III. Market Nature and Outlook
Nature of the Trend
Short-term geopolitical risks and rising costs created strong bullish expectations, but without a material improvement in domestic demand, the price rally lacked sustainable support. This is a typical case of “expectations leading the way, reality pulling back”.
Outlook
Short term: Prices will remain influenced by the Middle East situation, CNPC feedgas auction results, and the pace of downstream resumption of work.
Medium to long term: As new global LNG production capacity gradually comes online, prices are likely to return to supply-demand fundamentals, making large one-sided rallies difficult to sustain.