The government’s deal to limit Australian domestic gas price rises is about to come under enormous pressure from the booming export market in Asia and soaring prices — which could lead the government to dust off its threatened reservation policy again.

New data emerged yesterday showing Chinese imports of iron ore, coal, copper and oil fell sharply in October — there was a 23% slump in iron ore imports to their lowest level since February 2016; copper imports also fell to their lowest level since early last year; coal imports were down 12% month on month. Oil also fell, but that was a one-off due to special factors, and can be ignored for now.

The one commodity where there was a sharp rise was liquefied natural gas (LNG), and that’s good news for LNG exporters like Australia. It’s also bad news for Malcolm Turnbull and domestic gas users, who both want lower local gas prices. There’s a boom in LNG imports in Asia at the moment, with prices up a third in recent months, to more than US$9.35 per million British Thermal Units (which is at the bottom of the current Australian price range in the domestic market). It helps explain why Chinese gas imports from Australia jumped 16.3% last month from a year ago.

Analysts say that while demand from India has emerged as an added driver of the rise in demand, it is China that is the biggest factor. Gas arrivals in China, including pipeline imports and LNG shipments reached 5.81 million tonnes in October, down from September, but up from only 3.82 million tonnes in October last year. That left LNG imports for 2017 so far up 25%, at 54.16 million tonnes — which is more than all of last year’s total import volume of 54 million tonnes. China now has more gas demand than it has disclosed contracts to import (its own domestic supplies are inadequate), so it is buying heavily on the spot market, which is causing prices to rebound in Asia from the low levels earlier this year (those low prices were was helped spark debate in Australia about the prices we pay for gas against the cheaper prices in Japan).

The narrowing of the domestic premium in Australia compared to spot prices in Asia will start tempting Australian suppliers to boost exports on the spot market — despite that “agreement” with the Turnbull government to limit shipments next year, made in order to stave off the government’s threat of reservation.

And here’s some irony given the government’s wrestle with coal obsessives within its own ranks: a key driver of rising Chinese demand is Beijing’s effort to slash Chinese coal usage, given the immense damage pollution from both coal-fired power plants and steel production inflicts on Chinese people, as well as carbon emissions from coal. As the Financial Times reported yesterday, “Beijing’s push to replace coal with gas for heating as it tries to reduce chronic air pollution in urban areas and a lack of coal in India has driven up the price for the supercooled fuel.”

Net result: Australian gas prices are about to be goosed by the soaring Asian spot price for LNG. Then again, it’s not like Malcolm Turnbull has any other difficult issues on his plate at the moment.