Japan's LNG Imports Fall 7% as Utilities Chase Cheaper Coal

Japan last month reduced gas-fired generation in favor of coal as the price of liquefied natural gas remained elevated despite multiple reports of energy flows out of the Strait of Hormuz improving. The country generated 17.3 terawatt-hours from gas-fired power plants in June, Bloomberg reported, which was down by 16% on June 2025. Coal-fired generation, meanwhile, went up by 4.6%, according to data from the nine largest Japanese power utilities. Japan has been burning more coal and less gas for power generation since the war in the Middle East…

LNG Market Background

The global LNG market has undergone a structural transformation in recent years, with U.S. exports reshaping trade flows and providing consuming nations with greater supply optionality. European buyers have accelerated long-term LNG contracting following the disruption of Russian pipeline gas supplies.

New LNG liquefaction capacity — from the U.S. Gulf Coast, Qatar's North Field expansion, and Australian projects — is expected to add significant supply volumes through the late 2020s, with implications for long-term contract pricing and spot market dynamics.

What to Watch

Stakeholders will be tracking spot LNG cargo pricing in Asian and European markets, liquefaction plant utilization rates, and upcoming long-term supply contract negotiations as global LNG trade flows continue to evolve.