According to the data of ICIS LNG edge, an ICIS LNG price and shipping schedule tracking platform, China imported 76.27 million tons of LNG in the 12 months from June 1, 2020 to May 31, 2021, while Japan imported 76.32 million tons in the same period. Based on this, ICIS predicts that China is expected to overtake Japan as the world's largest importer of liquefied natural gas in the next few weeks.
The prolonged growth period of China's LNG demand can be attributed to its strong economic performance, supportive government policies and investment in LNG and gas infrastructure.
ICIS LNG edge data show that China's total demand for LNG in 2021 is expected to be 81.2 million tons and Japan's 75.2 million tons. Driven by structural growth and heating demand in winter peak, China's LNG demand reached a record monthly high of 8.6 million tons in January 2021. In the past seven months, China has imported more LNG than Japan in five months. According to ICIS LNG edge's demand forecast in June, China's LNG demand is much higher than that of Japan, which may mean that China will rank first for 12 consecutive months. Although the relatively high spot price of LNG makes China's pipeline natural gas imports more attractive economically, the overall growth trend of China's LNG demand is still obvious. China imports more LNG than Japan
At the beginning of this month, the shortage of coal caused power cuts in some cities in Guangdong, China, and several factories were required to use electricity quantitatively. At the same time, with the continuation of China's informal coal ban on Australia last year and the arrival of summer, China's domestic coal market is very tight at present, because the demand increases sharply, the domestic supply is limited, and the import level is lower than usual. Hendrian Sukardi, an Asian LNG Export expert of ICIS, said that this may also mean an increase in the import of its substitute LNG. It is expected that the import volume will increase by 21% this year, which means that China will overtake Japan as the world's largest LNG importer.
"China's national energy administration hopes that the proportion of national coal consumption in the energy structure will fall below 56% from 57% in 2020 this year, which will further promote the increase of demand for natural gas and liquefied natural gas, especially in the industrial field. The links between China's liquefied natural gas terminals, main pipeline natural gas infrastructure and provincial end-user networks are also strengthening. Yes The increased demand for liquefied natural gas and gas also shows China's determination to reach the peak of carbon emissions by 2030, "explained Helen Xu, director of market development of ICIS.
In contrast, Japan has had a structural surplus of LNG for some time. However, in January, Japan was faced with a major squeeze from the jump in power demand, which made the import of liquefied natural gas rise to a three-year high of 8.5 million tons. In the third quarter, Japan's LNG imports may be supported by the high temperature in summer, which will promote the air conditioning demand for gas-fired power generation.
Chinese state-owned LNG buyers have occupied an important position in the global market and hold equity in a series of related export projects. Independent Chinese LNG buyers are also becoming increasingly active. LNG sellers hope to expand their sales in China and develop in the domestic market. Like South and Southeast Asia, China will have a large demand for long-term LNG.
Edward Cox, editor of ICIS global LNG, said that the LNG import data is based on tracking the ships transporting LNG to global ports and then cross checking with customs data. By tracking the movement of ships, ICIS can estimate the latest delivery volume and total volume before the release of official data.
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