China to Launch Yuan LNG Futures on Shanghai Exchange

Written by Sandra Leggero

Sandra Leggero has a background in financial markets, having spent more than 9 years in commodities trading for several European and Asian companies. She holds a degree in Economics from the University of Pavia and specializes in emerging markets.

, | Updated: February 4, 2026

Key Moments

China plans to launch yuan-denominated LNG futures on the Shanghai Futures Exchange as soon as next month.
The contracts aim to reduce reliance on overseas benchmarks and dollar pricing for Chinese LNG imports.
Analysts expect China’s LNG imports to rise 12% to 76.5 million metric tons in 2026, supported by higher global LNG output.

China Prepares Yuan LNG Futures

China will soon launch its first LNG futures contracts listed domestically and settled in yuan, sources familiar with the plan say. The contracts give LNG importers a local tool to hedge prices and reduce dependence on Western markets.

The contracts are expected to list on the Shanghai Futures Exchange (ShFE). ShFE and the China Securities Regulatory Commission did not respond to requests for comment.

Challenging Foreign Benchmarks

ShFE aims to attract global participants and boost its international role, especially in major commodity markets like nickel and LNG. The new LNG futures will reduce the reliance on foreign price indices while encouraging foreign trading on the Chinese exchange.

A senior bank executive noted that China is a top commodity buyer, yet pricing is mostly set overseas. Yuan-based LNG futures are expected to narrow this gap.

Energy Security and De-Dollarization

U.S. trade policies have disrupted global energy markets. Chinese policymakers see yuan-denominated LNG contracts as a way to strengthen energy security and reduce the dollar’s role. Investment bank Morgan Stanley described this trend as part of a “multipolar world” that weakens the dollar’s dominance.

The futures will also deepen China’s domestic financial markets. Banks could create yuan-denominated LNG-linked products, including loans, repurchase agreements, and asset-backed securities.

Market Context: Imports and Supply

LNG shipments to China fell last year due to U.S. tariffs, lower industrial demand, and robust domestic supplies. However, global LNG production is set to rise in 2026, easing supply tightness from previous years.

Analysts expect China’s LNG imports to grow 12% to 76.5 million metric tons, according to Rystad Energy analyst Ole Dramdal.

Metric	Value
Expected increase in China LNG imports	12%
Forecast China LNG imports in 2026	76.5 million metric tons

Positioning Shanghai as a Pricing Hub

China hopes the LNG futures will compete with established global hubs, including Henry Hub in the U.S., Europe’s Title Transfer Facility, and the Japan-Korea Marker (JKM).

The new contracts are meant to strengthen Shanghai’s role as a regional LNG pricing center.

Foreign Participation and Market Access

Analysts expect strong interest from international oil companies, Western trading firms, and Middle Eastern exporters. Any foreign participant must set up a trading unit in China to access the contracts.

“China needs a benchmark that reflects its own demand and supply,” said a state gas trader involved in the discussions. “We foresee long-term supplies to China being tied to Shanghai contracts rather than Brent oil.”