China’s LNG Imports Rebound in May as Buyers Prepare for Summer
(Bloomberg) -- China’s liquefied natural gas imports rebounded in May as the world’s largest buyer stepped up purchases ahead of peak summer demand, reversing a months-long decline following disruptions to Middle East supplies.
LNG deliveries to China rose to 4.9 million tons in May, marginally higher than a year ago, according to ship-tracking data compiled by Bloomberg. That’s a stark reversal from the year-on-year contractions seen in previous months. April’s imports fell to the lowest level in eight years as higher prices triggered by the near-closure of the Strait of Hormuz weighed on demand.
The Iran war has choked shipments from the Gulf, which typically accounts for a third of China’s supply. The drop in LNG deliveries from Qatar has been offset by an increase from exporters including Canada, Malaysia, Oman and Russia, according to vessel-tracking data compiled by Bloomberg.
Declining gas inventories and the prospect of a hot summer this year have also compelled companies to buy more from the spot market, according to traders. State-owned Cnooc Ltd. last month bought several cargoes for June delivery while second-tier firm Zhejiang Energy International Ltd. purchased a cargo for July.
China’s increased appetite could tighten global supply as competition between Europe and Asia heats up for spare cargoes ahead of winter restocking requirements. Europe is so far lagging, with its 30-day moving average for deliveries down 13% year-over-year, according to the ship-tracking data.
China’s imports have remained soft over the past year as buyers have shied away from expensive LNG to rely on cheaper pipeline gas, as well as other substitutes such as coal and renewables. Still, a surge in domestic prices over the past months has pushing importers to look at importing more of the super-chilled fuel.
On the Wire
China’s yuan has strengthened to its highest level in nearly four years versus a basket of trading-partner currencies, underscoring the appeal of Chinese assets as a regional haven during the Iran conflict.
The recent Shanxi coal mine gas blast, which killed 82 workers, could become a catalyst for a broader consolidation push in China’s coal industry, said Bloomberg Intelligence.
Kazakhstan said the first phase of a new $15 billion Chinese-built aluminum complex will start up in 2028, expanding domestic processing of the country’s vast mineral resources.
BYD Co.’s total vehicle sales rose for the first time in nine months in May, buoyed by strong international demand as high oil prices spur the switch to electric cars.
This Week’s Diary
(All times Beijing)
Tuesday, June 2
- SNEC PV+ conference in Shanghai, day 1
Wednesday, June 3
- RatingDog’s China services & composite PMIs for May, 09:45
- SNEC PV+ conference in Shanghai, day 2
- Solar, battery & hydrogen exhibitions, day 1
- CCTD’s weekly online briefing on coal markets, 15:00
Thursday, June 4
- SNEC PV+ conference in Shanghai, day 3
- Solar, battery & hydrogen exhibitions, day 2
Friday, June 5
- China’s weekly iron ore port stockpiles
- SHFE’s weekly commodities inventory, ~15:30
- SNEC PV+ solar, battery & hydrogen exhibitions in Shanghai, day 3
Saturday, June 6
- Nothing major scheduled
Sunday, June 7
- China’s foreign reserves for May, including gold
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