China Becomes World’s Second-Largest Liquefied Natural Gas Importer in 2017
China overtook South Korea to become the world’s second-largest liquefied natural gas (LNG) importer in 2017, figures from S&P Global Platts showed Thursday, highlighting the country’s ballooning demand for the fuel as it ramps up efforts to stem pollution.
China bought a total of 37.89 million metric tons (41.77 tons) of LNG from overseas last year, an increase of more than 48% from 2016, according to data compiled by the international energy and commodity information provider. Purchases in December alone reached 5.05 million metric tons, the highest-ever monthly volume since the country started importing LNG in 2006.
Japan remained the largest LNG importer in the world last year with purchases of 81.61 million metric tons, up 2.3% from a year ago. South Korea fell to third, with its inbound shipments rising nearly 11% year-on-year to 36.51 million metric tons.
China’s surging demand is partly why the LNG spot price has continuously grown in recent months. It hit a three-year high of $11.2 per million British thermal units (Btu) on Wednesday, more than double the 2017 low point of $5.4 in March, according to Platts JKM, the LNG benchmark price assessment in Asia. A Btu measures the amount of heat required to raise the temperature of 1 pound of water by 1 degree Fahrenheit.
“Robust demand from China was one of the important factors behind the recent Asian LNG price rally,” said Marc Howson, senior managing analyst of LNG at S&P Global Platts. He also cited expectations of greater Japanese consumption due to cold weather across North Asia and buyers’ limited choice of suppliers as reasons for the price increases.
China’s use of natural gas spiked last year amid a government campaign to replace coal-fueled heating systems with natural gas- and electricity-powered ones, with a focus on both residences and industrial buildings across the country’s smoggy north.
Consumption in January through November 2017 was 18.9% higher than in the same period in 2016, dwarfing the average annual growth rate in the 2012 to 2016 period of around 11%, according to figures previously published by the National Development and Reform Commission (NDRC), China’s top economic-planning body.
Prices of natural gas, particularly LNG, went up quickly in the country over the past few months as a supply crunch gripped swaths of the country in the heating season, prompting the NDRC to step in by ordering local authorities last month to strengthen the oversight of suppliers to prevent activities such as hoarding and price-fixing.
Authorities last month also eased controls on households’ coal burning for heating in some northern areas where the transition to natural gas or electricity hasn’t been completed.
The government intervention apparently has had an effect — the domestic LNG price dropped by more than 33% in just eight days to about 5,600 yuan ($861) on Tuesday, the Shanghai Securities News reported.
“A shift back to greater usage of thermal coal for power generation across the country, as well as significant restocking activity by major LNG imports in November and October, have alleviated the gas shortages in North China and depressed domestic LNG prices,” Howson said.
Contact reporter Fran Wang (email@example.com)
- 1In Depth: Cash-Strapped Local Governments Turn to Financing Vehicles to Plug Fiscal Shortfalls
- 2Weaker Demand for Chinese Goods Spells End of Shipping Boom
- 3China Foreign Minister Urges U.S. to Clearly Denounce Taiwan Separatist Activities
- 4Former Head of Exim Bank’s Beijing Branch Kicked Out of Communist Party
- 5E-Commerce Giant Shopee Cuts Jobs in China, Indonesia and Singapore
- 1Power To The People: Pintec Serves A Booming Consumer Class
- 2Largest hotel group in Europe accepts UnionPay
- 3UnionPay mobile QuickPass debuts in Hong Kong
- 4UnionPay International launches premium catering privilege U Dining Collection
- 5UnionPay International’s U Plan has covered over 1600 stores overseas