The world’s second largest LNG importer after Japan is on track to import its highest monthly volumes since December 2019, Refinitiv shiptracking data showed.
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.
China 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.
China’s apparent consumption of natural gas increased 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).
October alone saw an 11.4 percent jump year-on-year in natural gas consumption, reaching 26.78 billion cubic meters, NDRC data showed.
“Gas demand has been robust with industrial usage driven by strong exports being the key driver,” another Beijing-based source said.
China’s exports rose at the fastest pace in almost three years in November on booming global demand for appliances, clothing, personal protective gear and other goods.
China’s demand for gas for heating has also been rising.
Still, with Asian spot LNG prices at their highest since 2018 Chinese buyers may slow imports from January, several sources 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.
(Reporting by Jessica Jaganathan in Singapore and Muyu Xu in Beijing, additional reporting by Chen Aizhu)