Lockdowns Take Toll on China's LNG Demand

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China’s widening Covid-19 lockdowns and a sputtering economy are curbing its once-stellar LNG demand growth. LNG imports fell by 11% year to year in the first quarter to 17.28 million tons. Kpler data suggests the decline widened to 16% in this year's first four months, putting China back behind Japan among the world's top importers. Lockdowns in Shanghai since mid-March, followed by Beijing and other cities more recently, are taking a toll on China's industrial, logistics and manufacturing sectors. Beijing remains committed to its "zero Covid" strategy, making it unclear how badly LNG demand could be set back in coming months amid still-high spot LNG prices. China's overall LNG and pipeline gas imports totaled 27.82 million tons in the first quarter, down 5.1% from a year ago. While LNG imports fell 11%, pipeline gas imports rose 7% to 10.54 million tons. China overtook Japan last year as the world's top LNG importer, but Japan regained the crown in the first quarter with imports of 20.4 million tons despite its volumes falling 12% from a year earlier. Weaker demand and high spot LNG prices also led Chinese buyers to shun and resell pricier LNG cargoes in favor of domestic gas production and pipeline gas imports. Increasing domestic gas production is an energy security priority for Beijing, and in the first quarter, Chinese state firms boosted gas output at home by nearly 7% to 56.9 billion cubic meters.

LNG Demand, LNG Trade, LNG Contracts, LNG Supply, LNG Prices, Gas Demand
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