Without Qatar's LNG—opportunities for China National Chemical Corporation, risks for Asian power companies

Qatar has shut down its 77 million tons per year Ras Laffan LNG plant, and the global natural gas market has immediately entered a state of high tension. This event not only caused European natural gas prices (TTF) to surge over 50% in just a few days but also profoundly reshaped the supply and demand landscape of the global energy and chemical industries.

On March 7, according to Chasing Wind Trading Platform, based on the latest research reports from HSBC, HSBC Qianhai, and Morgan Stanley, this event is reshaping the global LNG supply and demand pattern while also creating very different industry fates within Asia:

For Asia’s power industry, which is highly dependent on Middle Eastern LNG, the threat of physical supply shortages is imminent; whereas for China’s chemical industry, which is sensitive to European natural gas prices, the sharp increase in European competitors’ costs may open a rare structural opportunity window for domestic companies.

According to the latest report from HSBC Global Research, QatarEnergy announced on March 2 that it had ceased LNG production at Ras Laffan and declared force majeure. The facility’s annual capacity reaches 77 million tons, accounting for about 20% of global LNG supply. If we include a roughly two-week restart window, assuming a four-week shutdown, the market will lose at least 8 million tons of LNG, nearly 2% of the annual global supply.

In this context, European TTF natural gas prices surged about 70% in just two trading days, and Asian JKM prices also rose about 50%, both hitting nearly three-year highs.

HSBC Qianhai Securities states that the surge in European natural gas prices has driven up local chemical production costs, providing structural market share expansion opportunities and product premium space for China’s chemical industry (especially in MDI, TDI, vitamins, and methionine sectors).

Additionally, HSBC analysts clearly distinguish the risk nature between Europe and Asia: Europe faces a price issue, not a physical availability issue; Asia faces the opposite — whether physical supply can be guaranteed. Morgan Stanley Asia-Pacific research also pointed out that Asia’s power industry depends on Middle Eastern LNG by about 20%, and the continuity of data center and grid supply is under real threat, possibly forcing a shift to coal and other alternative energy sources.

Qatar LNG supply disruption: the “black swan” of the global natural gas market

QatarEnergy announced the closure of its Ras Laffan LNG plant and declared force majeure, directly cutting nearly 20% of global LNG supply. Ras Laffan is the world’s largest LNG export facility, with an export volume of 82 million tons in 2025.

HSBC states that the shutdown of this facility is not solely due to the Strait of Hormuz blockade — because of the inability to export goods, on-site storage tanks (capacity only about 1 million tons, less than five days of normal loading) quickly became saturated. QatarEnergy had no choice but to halt production.

This is crucial: the market faces not only shipping disruptions caused by the Strait blockade but also the time loss involved in restarting large, complex facilities.

HSBC reports that, absent major infrastructure damage, restarting could restore 40-50% of capacity in about a week, reaching full capacity within two weeks; but if hardware damage or regional instability persists, the timeline will extend further. Reuters estimates that restarting itself takes two weeks, and reaching full capacity another two weeks.

In terms of supply loss magnitude, HSBC estimates: a one-month shutdown results in about 6.8 million tons lost, three months about 20.5 million tons, and six months up to approximately 41.1 million tons, representing about 1.5%, 4.6%, and 9.3% of 2025 global LNG trade volume, respectively.

HSBC notes that considering Trump’s previous statement that the Iran war plan would last “about four to five weeks,” plus a two-week restart window, the mainstream market scenario assumes a supply loss of no less than 8 million tons.

This news triggered extreme market volatility. European benchmark natural gas (TTF) surged 50% upon announcement, breaking $16 per million British thermal units (MMBtu), and then accumulated about 70% increase over two trading days, hitting a three-year high. Asian spot LNG (JKM) also rose about 50%.

It’s worth noting that the global LNG market already has little surplus capacity to compensate. The US, the world’s largest LNG exporter, is estimated to have only about 5% spare capacity remaining (around 6 million tons). Norway’s energy minister said the country’s gas operations are near full capacity. Australia, the largest LNG supplier to Asia, also has limited spare capacity.

For Europe, although its direct dependence on Qatar LNG has fallen to 4% (mainly due to increased US LNG imports), current gas inventories are only about 30%, expected to fall to 26% by the end of winter. During summer storage replenishment, Europe will face fierce competition with Asia. The main issue for Europe is a “price problem”—payting higher premiums to attract Atlantic Basin LNG cargoes.

For Asia, the problem is a deadly “physical availability.” Asia’s LNG imports in 2025 include 26% from Qatar and the UAE. Countries like Pakistan and Bangladesh, highly dependent on Qatar LNG for power generation, face extremely high supply disruption risks.

China’s chemical industry opportunities: expanding market share under high European costs

The surge in European natural gas prices caused by Qatar LNG supply disruption directly impacts Europe’s chemical industry cost structure.

According to HSBC Qianhai Securities, vitamins, methionine, and polyurethanes (MDI/TDI) are the most sensitive segments to rising European natural gas prices. Europe holds a significant share of the global capacity for these high-margin chemicals.

As European producers face cost pressures, Chinese chemical companies gain a clear competitive advantage. Amid geopolitical tensions, producers have begun raising prices, and distributors are increasing inventories of MDI/TDI and feed additives to hedge against price rises.

Profit sensitivity and structural expansion Despite the fact that European natural gas prices have not yet triggered widespread shutdowns, the event-driven pricing mechanism has met the structural loosening of supply and demand. For Chinese chemical companies, rising product prices directly translate into increased profits.

The report cites methionine as an example: if the price rises from a baseline to 25,000 RMB/ton (up from 5,000 RMB/ton), related companies’ earnings per share could increase by about 29%.

In the polyurethane sector, a 1,000 RMB/ton increase in MDI spread could boost related companies’ profits by about 15%; for pure MDI and TDI, a 1,000 RMB/ton increase could lead to profit increases of approximately 7% and 9%, respectively. This high profitability is expected to support structural capacity expansion of Chinese chemical companies in these fields.

Risks for Asia’s power sector: fuel shortages and rising costs

Morgan Stanley’s report states that Asia’s power and natural gas industries depend on Middle Eastern LNG by about 20%. The force majeure disruption of Qatar LNG poses serious challenges to data centers and power grids across Asia.

The report highlights that among Asian countries, India and Thailand face the highest spot LNG risk exposure.

• About one-sixth of India’s natural gas demand comes from the Strait of Hormuz;*
• 11% of Thailand’s Gulf Development gas supply comes from the Strait, with a net exposure of 6%;*
• Manila Electric in the Philippines has up to 50% of its gas supply relying on Strait of Hormuz LNG.*
• In contrast, Malaysia and Indonesia’s public utilities are less affected by fuel availability issues.*
• Japan and South Korea, with 11% and 20% of LNG imports from the Middle East respectively, mainly use LNG for power generation, and Japan can mitigate short-term shocks by utilizing its LNG reserves.*

Morgan Stanley notes that the widening spark spread and rising coal-to-LNG prices have directly led to increased spark spreads in power markets, especially in commercialized markets like the Philippines and Singapore, where high-efficiency operators see significant profit margin increases.

Faced with LNG supply uncertainty and high prices, coal once again becomes a key alternative energy source to ensure uninterrupted power supply.

Morgan Stanley’s research shows that, at an LNG landed price of $15 per MMBtu, combined cycle gas-fired power costs are much higher than coal power, accelerating the fuel switch.

In South Asia, due to flexible capacity and new coal plants coming online, the gas-to-coal switching is accelerating. The significant price discount of coal compared to alternative fuels further drives this trend.

HSBC also points out that short-term incremental supply sources are limited, and demand-side responses will be the main market balancing mechanism, primarily through switching from natural gas to coal for power generation.

All the above content is from Chasing Wind Trading Platform.

For more detailed analysis, real-time insights, and frontline research, please join 【**Chasing Wind Trading Platform ▪ Annual Membership**】

![](https://img-cdn.gateio.im/social/moments-f137c7a4ac-e1de45be97-8b7abd-ceda62)

Risk Disclaimer and Terms

Market risks exist; investments should be cautious. This article does not constitute personal investment advice and does not consider individual user’s specific investment goals, financial situation, or needs. Users should consider whether any opinions, views, or conclusions herein are suitable for their particular circumstances. Invest at your own risk.