The share of U.S. LNG exports to Asia grew from 27% to 40% across Q2 to Q3, as market fundamentals drove more favourable JKM-NWM (LNG Northwest Europe Marker) spreads, which reached around $1.50/mmbtu for September delivery, attracting greater volumes of destination-flexible U.S. Gulf Coast exports to Asia.

European LNG demand has remained subdued throughout much of 2024, down almost 20% vs. 2023 year-to-date; downstream European gas demand weakness has remained persistent, fuelled by strong wind and solar load factors, along with improved hydro and nuclear availability. Meanwhile, Asian LNG demand has risen by 9% year-on-year from January to September, led by price-sensitive Chinese buyers attracted by relatively lower prices in Q2, as well as heatwave-driven demand across South and Southeast Asia over the summer.

While still elevated, JKM-NWM spreads narrowed slightly across August to September, as NWM month-ahead prices rose in response to perceived supply risks (e.g., Sudzha incursion in Ukraine, Middle East tensions etc.), with European LNG imports improving in tandem.

Cross-basin competition for flexible U.S. LNG supply is expected to grow this winter as heating season begins, with the future of Russian pipeline supply transit through Ukraine, Northern Hemisphere temperatures and the pace of both European and Chinese industrial output recovery likely to be key drivers of the global market balance.

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