China’s imports of liquefied natural gas this month are expected to be the lowest since 2018, based on data from Kpler, Bloomberg has reported, citing soaring prices.
April LNG arrivals are seen at 3.5 million tons, which would also be a 30% drop on a year ago, the report said. An earlier report by Reuters pegged China’s LNG imports for April at 3.36 million tons, again based on Kpler figures, comparing that to a total 7.66 million tons for December, during the seasonal demand peak.
China has also been re-exporting LNG cargoes, with the total for March hitting an all-time high of 720,000 tons before dropping to just 30,000 this month.
The war in the Middle East took out a quarter of global LNG capacity, pushing prices significantly higher, pricing poorer importers out of the market. As a result, overall Asian imports of liquefied gas dropped in March to the lowest in seven years, by 4.3% on the year, to 21.12 million tons. The data comes from the Gas Exporting Countries Forum.
“Asia faced the largest decline, with imports hitting a seven-year low for March as the market braced for a tightening supply squeeze, especially significant given that over 80% of the LNG transiting the Strait was destined for Asian markets before the conflict,” the GECF said.
Even so, Asian buyers were still prepared to pay a premium for LNG, outbidding Europe for at least a dozen cargos that diverted en route to European destinations to deliver the fuel to Asian destinations instead.
The impact of the Middle East war on gas demand could turn structural if the war continues for another few months, the head of the GECF warned earlier this month. “If the conflict ended today, the world would recover in six months to a year. But if it lasts six months, those knee-jerk changes we are seeing could become structural,” Philip Mshelbila said at an industry event.
By Irina Slav for Oilprice.com
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