According to Bloomberg, China’s liquefied natural gas (LNG) imports are projected to fall for the 13th consecutive month in November compared to last year. This ongoing decline is attributed to strong domestic production and robust piped gas imports.
Kpler, a shipping analytics firm, estimates that deliveries will reach approximately 5.81 million tons this month-marking a decrease of about 5.5% from the same period in 2022 based on customs data from China.
This year has seen a dip in demand for LNG within China as buyers opt for more affordable piped gas sourced from Russia and Central Asia instead of pricier seaborne shipments. Additionally, local production levels have remained high.
As winter approaches, there appears to be little urgency for China to engage with the spot market due to favorable early weather forecasts predicting mild temperatures across the nation. The country has already secured sufficient heating fuel through long-term contracts for the upcoming months.
Last year, China held the title of the world’s largest LNG importer; however, its current sluggish demand raises concerns about potential oversupply globally as new projects are set to launch in various countries over the next few years. Analysts at Goldman Sachs Group Inc. suggest that even if prices drop significantly, it’s unlikely that Chinese importers will absorb all available LNG supplies-leading towards an enduring surplus.
Tanker hiring costs have surged recently due to increased exports from North America leading up more vessels being occupied; rates have reached $150,000 per day-the highest since December last year according to Spark Commodities data.
