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China's LNG imports could hit a record high in Dec as industrial demand returns Reuters reported sources saying. Domestic gas consumption for early December up 20% year-on-year adding to the LNG demand.

LNG Ship Australia

The Chinese industrial has seen a bounce back from Covid damage as we see China's exports rising at the fastest pace in nearly three years in November on returning global demand for appliances, clothing, personal protective gear and other goods.

China's liquefied natural gas (LNG) imports could hit a record in December on strong industrial demand and a continued gasification push, trade sources said.

China is the world's second largest LNG importer after Japan. Refinitiv shiptracking data have them on track to import its highest monthly volumes since December 2019.

Asian spot LNG prices at their highest since 2018 Chinese buyers may slow imports from January, several sources said.

China is embroiled ina bitter trade war with it's largest importing source of most commodities, Australia who are the world's largest gas exporter. October saw an 11.4 percent jump year-on-year in natural gas consumption, reaching 26.78 billion cubic meters, NDRC data showed.

Australia is on track for a new annual record on LNG exports after Queensland's three plants collectively exceeded their rated production capacity for the first time ever, but a slump in prices means revenues will be well down.

Exports of liquefied natural gas from Australia were running 1.2 million tonnes ahead of last year by the end of November, and exports for the full year could reach a new high of 78 million tonnes, consultancy EnergyQuest said.

That's more than the production capacity of rival exporter Qatar, at 77 million tonnes, although QATAR aims to lift capacity to 126 million tonnes a year by the end of the decade.

Australia's monthly LNG export revenues hit a low in September, at about $1.8 billion, about 60 per cent down from March's $4.4 billion. Prices have started to recover, including a remarkable rebound in spot rates, and revenues may be about $2.9 billion for November EnergyQuest chief executive Graeme Bethune noted.

December's imports may set a new record, with domestic gas consumption for early December up 20% year-on-year, two sources familiar with the Chinese gas market told Reuters.

"Domestic gas demand is really strong, as some provinces and cities are rushing to hit their five-year goals for coal-to-natural-gas switch, creating new pockets of industrial demand," said a Beijing-based gas trader according to Reuters

China has pledged to switch 7.09 million households in 45 cities in northern China from coal to gas or electricity this winter, part of its ongoing plan to use gas to cut emissions.

Reuters reported that China's "apparent consumption of natural gas" rose 5 percent year on year to 257.73 billion cubic meters in the January-October period, according to latest data from the National Development and Reform Commission (NDRC). 

"Gas demand has been robust with industrial usage driven by strong exports being the key driver," another Beijing-based source said.

 

"It feels like the gas crunch in 2017 is reappearing once again. Prices are soaring crazily but still it's almost impossible to find any supply. I have no choice but to halt business for a while," said a Tangshan-based LNG trader who buys imported LNG from a state-backed energy company and sells it to local users, such as steel mills and gas stations.

Sources Reuters. AFR

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