LNG Imports into Northeast Asia at Record High
Shipments of liquefied natural gas (LNG) into Northeast Asia have risen to a record in December, mainly driven by China's continued gasification push, and as the region faces colder-than-usual temperatures this week.
LNG imports into China, Japan, South Korea and Taiwan, have climbed to 20.5 million tonnes so far in December, 5 percent higher than the previous monthly record of 19.5 million tonnes back in January, data from Refinitiv Eikon showed.
December shipments were nearly 15 percent higher than November, the data showed.
"When we look at the region, we think it is mainly China which has been driving the North Asian growth over November to December," said Kittithat Promthaveepong, lead analyst at energy consultancy FGE.
"This was likely because of the spot supplies they had contracted for earlier in the year to avoid a shortage this winter."
LNG imports into China have risen to a record of about 6.5 million tonnes so far in December, up 6 percent from the previous high in November as households and businesses crank up their heating with the start of the Northern Hemisphere winter.
China's government has ordered residents and businesses to shift to natural gas for heating from coal to reduce air pollution. To avoid shortages, Chinese companies procured supplies ahead of the winter.
Shipments to Japan also rose to a 10-month high in December, likely due to colder weather, but this could be a temporary increase as inventories are high, a Japan-based trader said. He added that buyers have largely finished their spot procurement for winter.
Temperatures across Tokyo, Beijing and Seoul are expected to be colder than normal this week, with a widespread cool-down likely to cover China over the next 10 days, weather forecasts from Refinitiv Eikon show.
However, Japan is likely to experience average-to-warmer weather between January and March next year.
In South Korea, LNG imports also rose in December. The country's LNG imports have generally been strong this year due to maintenance at nuclear power plants and a delay in the start-up of new nuclear plants, said Ken Lee, a senior analyst at FGE.
"Over January to February, we expect these relatively high imports to continue, but the recent cold spell in China means that they'll be able to absorb more volumes over first quarter of 2019 as stocks diminish," FGE's Promthaveepong said.
(Reporting by Jessica Jaganathan, additional reporting by Jane Chung; Editing by Christian Schmollinger)