China is curbing liquefied natural gas (LNG) imports due to sustained high global prices. The ongoing closure of the Strait of Hormuz has restricted approximately 20% of the world's supply.
Beijing has increased its reliance on coal for thermal power generation to compensate for lower gas intake. Coal-fired power output rose for the fourth consecutive month in April.
This shift creates a significant headwind for the global LNG market and may place a ceiling on spot prices. The reduction in Chinese demand occurs as Europe seeks alternative supplies to fill critically low storage facilities before winter.
Investors are monitoring these dynamics for their direct impact on the profitability and outlook for U.S. LNG exports.