Lower LNG supply and higher prices expected to weaken China’s demand while Europe stays the premium market in 2025

Market & trading calls for 2025

European TTF price outlook: ▲ Bullish as the average price forecast was raised for summer 2025 due to downward revisions on net pipeline supply to Europe and lower underground gas storage levels by the end of the 2024-2025 winter period. European TTF prices to average $13.46/MMBtu in 2025.  

Asian LNG price outlook: ▲ Bullish as Asian front-month LNG prices were revised upwards for the upcoming summer season to reflect lower supply in the Pacific basin and increased competition for LNG cargoes with Europe. Asian LNG front-month prices are projected to average $12.89/MMBtu in 2025.

US Henry Hub price outlook: Neutral as looming mild weather in March combats the impact of recently implemented tariffs between Canada and the US. While the market shock associated with the tariffs may wane in the coming days, expectations of a strong storage injection season will likely lend some upward support to the April contract this the month. Henry Hub front-month prices are expected to average $3.68/MMBtu in March.

Key changes in supply:

▲ Quicker ramp-up from US’ Plaquemines to offset a slower ramp-up from the Corpus Christi Stage III expansion in 2025. US forecast to export 103.2 mt in 2025, up from 87.1 mt in 2024.

▼ Australian LNG supply lowered in 2025 due to underperformance at North West Shelf. In 2026, Pluto phase 2 is expected to export its first cargo in September, 4 months later than previous expectations. Australian LNG export forecast at 77 mt in 2025 and 80.6 mt in 2026, down from 81.3 mt in 2024.

▼ Nigerian LNG prompt and summer supply weaker in 2025 due to recent pipeline vandalism. Nigeria forecast to export 13.6 mt in 2025, down from 14.6 mt in 2024.

▼ First LNG export at LNG Canada expected in late May, a delay of one month which has reduced Canadian LNG supply to 4 mt in 2025. Mexico’s Costa Azul project pushed back to April 2026, a delay of 3 months due to a revised timeline by Sempra.

2025 LNG supply forecast changes since February LNG monthly report (mt)

Source: Kpler Insight

LNG supply from major exporting countries (mt)

Source: Kpler Insight

y/y LNG supply changes by year for major exporting countries (mt)

Source: Kpler Insight

LNG demand

Key changes in demand:

▲  European LNG demand revised higher due to additional restocking requirements, higher year-on-year LNG imports from Turkey and the UK, and lower net pipeline supply during 2025.

▲  South Korea LNG demand  for 2025 revised higher on colder weather and increased nuclear maintenance in H2 2025.

▲  Taiwan LNG demand  for 2025 revised slightly higher on updated government data.

▼ Global LNG demand revised lower in 2025 due to lower LNG supply expectations.

▼ China’s 2025 LNG demand revised lower on weaker February imports and methodology update.

▼ Japan’s 2025 LNG demand revised lower on weaker February imports and higher prices.

▼ India and Thailand’s 2025 LNG demand revised slightly lower on higher prices.

2025 LNG demand forecast changes since February 2025 LNG monthly report (mt)

Source: Kpler Insight

LNG demand for major regions (mt)

Source: Kpler Insight

y/y LNG demand changes by year for major importing countries (mt)

Source: Kpler Insight

Price Forecasts

Price forecasts

The European TTF front-month contract averaged $15.33/MMBtu in February, up from $14.68/MMBtu in January. Prices rallied in the first ten days of the month, briefly surpassing $17/MMBtu, following reports that Germany could introduce subsidies to help market participants meet storage targets by 1 November. However, as the measure failed to materialize, prices lost momentum and experienced a sharp decline in the latter half of February. The drop was driven by hopes for a potential resolution to the Russia-Ukraine war, following US-lednegotiations, as well as expectations that the European Commission would lower storage targets for 2024. By the end of the month, TTF front-month prices had fallen to $13.52/MMBtu, marking a $2.70/MMBtu decline from end-January. In contrast, Asian LNG front-month prices edged higher from $14.10/MMBtu in January to $14.40/MMBtu in February, primarily driven by higher European TTF prices and colder weather in Northeast Asia leading to higher gas demand for heating.

Kpler Insight has raised its European TTF and Asian LNG price forecasts for 2025 to capture lower LNG supply throughout the year in the Pacific basin and the rapid depletion in European gas stocks. The latter has come due to the y/y decline in Norwegian gas exports to Europe, the sudden increase in Ukrainian gas imports, and higher LNG imports from the UK and Turkey this year fuelled by underperforming wind generation in NW Europe and cold snaps in Southern and SE parts of the continent. Based on this, we expect European TTF prices to average $13.46/MMBtu in 2025, compared to $10.97/MMBtu in 2024. Similarly, Asian LNG front-month prices are anticipated to average $12.89/MMBtu, extending their upward trajectory from $11.90/MMBtu in 2024.

In addition, we expect the average price spread between European TTF and Asian LNG front-month contracts to slightly narrow to $0.47/MMBtu in 2025 from $0.56/MMBtu in our previous assessment driven by the recent loss in European prices and the anticipation of competition for LNG cargos in the upcoming summer season. In 2024, Asia was the premium market, with the spread at $0.93/MMBtu over European TTF. However, we maintain our view that Europe is set to retain its position as the premium market for flexible LNG supplies throughout most of 2025.

European TTF vs Asian LNG average price by year ($/MMBtu)

Source: Kpler Insight. Monthly price forecast can be found in the Excel dataset.

US netback forecast to Asia and Europe ($/MMBtu)

Source: Kpler Insight

Key bullish/bearish price risks:  

▲ Colder than expected end to winter 2024-2025.

▲ Liquefaction project delays in Canada and slower-than-expected ramp up of new US plants.

▲ Increased pipeline exports to Ukraine throughout the year.

▲ Lower year-on-year Norwegian gas production in 2025.

▲ Prolonged unplanned liquefaction plant and pipeline outages.

▲ Underperforming wind generation in Europe.

▲ Unexpected nuclear capacity outage in Japan and South Korea.

▲ Investment funds lengthening their positions on the TTF.

▲ Above-average summer temperatures in Asia and Middle East raising competition with Europe.

▼ Russia-Ukraine peace deal revives Russian pipeline gas deliveries to Europe.

▼ US dropping sanctions on Russia revives Arctic LNG 2 project.

▼ Easing EU commission pre-winter storage targets.

▼ Investment funds shortening their positions on the TTF.

▼ Above-average northern hemisphere temperatures in late winter 2024-25.

▼ Higher gas pipeline imports and domestic production in China.

▼ China’s economic growth rate slows further.

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• Global LNG supply forecasts
• Pacific basin LNG demand forecasts
• Atlantic basin LNG demand
• Excel dataset

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