Early signs of a recovery in Asian LNG demand are emerging, potentially tightening global balances and skewing risks to European gas prices to the upside, Goldman Sachs said in a note on Thursday.
The bank said preliminary May data show Asia LNG imports running about 4 million tonnes per annum (mtpa) above its 225 mtpa forecast, driven by rising demand in China and South Korea as summer consumption and storage rebuilding gather pace.
"Weak Asia demand has bought Europe time," Goldman Sachs said, noting that softer imports had freed cargoes for Europe and capped TTF prices. But it warned that this dynamic could reverse as Asian summer demand and inventory rebuilding gather pace.
The bank said that China imports have risen to a four-week average of 48 mtpa from 36 mtpa in March, with further gains expected, including to around 67 mtpa in the third quarter, as inventories rebuild to slightly above last year's levels. South Korea imports have also climbed to 42 mtpa, above April levels.
Stronger demand has lifted the JKM premium over TTF to $1.87/mmBtu in May from $1.59 in April, signalling firmer Asian appetite, it added.
Goldman Sachs said TTF could rise to 65 euros/MWh in Q3 2026 and 53 euros in Q4 if disruptions from the Strait of Hormuz persist beyond its late-June base case, versus baseline forecasts of 44/40 euros.
The bank said preliminary May data show Asia LNG imports running about 4 million tonnes per annum (mtpa) above its 225 mtpa forecast, driven by rising demand in China and South Korea as summer consumption and storage rebuilding gather pace.
"Weak Asia demand has bought Europe time," Goldman Sachs said, noting that softer imports had freed cargoes for Europe and capped TTF prices. But it warned that this dynamic could reverse as Asian summer demand and inventory rebuilding gather pace.
The bank said that China imports have risen to a four-week average of 48 mtpa from 36 mtpa in March, with further gains expected, including to around 67 mtpa in the third quarter, as inventories rebuild to slightly above last year's levels. South Korea imports have also climbed to 42 mtpa, above April levels.
Stronger demand has lifted the JKM premium over TTF to $1.87/mmBtu in May from $1.59 in April, signalling firmer Asian appetite, it added.
Goldman Sachs said TTF could rise to 65 euros/MWh in Q3 2026 and 53 euros in Q4 if disruptions from the Strait of Hormuz persist beyond its late-June base case, versus baseline forecasts of 44/40 euros.
