India Eyes Higher LNG Imports as Prices Hit 16-Month Low

India is set to step up purchases of liquefied natural gas (LNG) as global spot prices for the fuel have dropped to their lowest point in over a year. The fall has created an opportunity for buyers to secure cheaper shipments and replenish storage levels while also meeting the growing requirements of industries such as fertiliser and power generation.

Global Trends Driving the Market

The decline in LNG prices is largely the result of weaker demand from two of Asia’s largest importers, which has pushed down the benchmark rates. Prices for shipments headed to India are currently trading in the low-$10 per million British thermal units range, the most affordable levels seen since mid-2024. 

Such price movements make LNG more competitive compared with alternative fuels, encouraging Indian buyers to act swiftly.

Meeting Rising Domestic Demand

For India, securing more LNG at these lower rates is especially important. Domestic demand for natural gas continues to expand, particularly from industries that rely heavily on steady and cost-effective energy supplies. 

Fertiliser producers are among the biggest consumers, and affordable LNG helps reduce input costs while ensuring consistent production. By tapping into the current price dip, buyers are also able to offset earlier declines in LNG imports, which have fallen nearly 9% so far this year compared with the same period last year.

Timing and Strategic Advantage

The timing of this buying spree is crucial. With storage facilities being replenished ahead of the winter season, India has the chance to build a buffer against any potential price spikes that may occur later in the year. 

Historically, LNG prices tend to fluctuate in colder months due to increased global heating demand. Acting now allows Indian buyers to lock in supplies at more favourable rates.

A Balancing Act in Global Energy

The move also highlights India’s balancing act in the global energy landscape. While Europe’s natural gas markets are preparing for winter with ample reserves and Asia’s largest importers scale back, India finds itself in a position to take advantage of the softer market. 

This approach not only supports domestic energy security but also positions the country to manage future volatility in global energy prices more effectively.

Read more:Government Pushes LNG Adoption with 100% FDI

Looking Ahead

With spot prices at multi-month lows, India’s LNG importers are expected to continue seeking additional shipments in the near term. The current trend suggests a window of opportunity for buyers to strengthen their supply base while keeping costs under control.

How long this price softness lasts will depend on global demand patterns, but for now, India is making the most of the favourable market conditions.

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