China imported more LNG than Japan in November and December 2019
According to Reuters, data from Refinitiv Eikon shows that China imported a record high monthly volume of LNG in December 2019, overtaking Japan as the world’s top LNG importer for the second month in a row.
Reuters reports that China imported 7.198 million t of LNG in December, up nearly 16% from November. Japan, meanwhile, imported 6.574 million t in December, up nearly 7% from November.
The data shows that, whilst China only marginally surpassed Japan in terms of LNG imports in November (the first time it has done so), it exceeded Japan’s LNG imports by a significant amount the following month.
According to Reuters, analysts have said that China’s position above Japan will not last beyond winter.
Hiroshi Hashimoto, senior analyst, head of gas group at the Institute of Energy Economics, Japan (IEEJ), said: “I assume the reversal is due mainly to a seasonal boost in LNG demand from China, but the long-term trend of weakening LNG demand in Japan to reflect increasing renewable energies and restarts of more nuclear power plants was also behind.”
Nevertheless, Wood Mackenzie claims that China is set to overtake Japan as the world’s leading LNG importer in terms of annual volumes early this decade.
China’s demand for gas has been on the up due to a government push to transition residential and industrial energy users off coal-fired power and heating to natural gas to mitigate pollution. Japan, meanwhile, has seen its energy demand decrease due to a combination of an ageing population and competition from other energy sources, such as nuclear power.
Alicia Wee, LNG analyst at consultancy FGE, said: “While both Chinese and Japanese gas demand peak during winter, China’s gas demand typically experiences a greater seasonal swing due to its strong gas requirements for heating, particularly with the ongoing coal-to-gas switching in northern China.”
According to Reuters, traders have said that it is not a sudden rise in domestic demand that caused China’s LNG imports to rise in December. Rather, it is likely imports rose due to the arrival of term volumes buyers committed to previously and spot volumes purchased earlier in the year.