Chinese LNG demand in 2023 is expected to increase by 9-14%
RIYADH: China’s liquefied natural gas demand is expected to recover in 2023 as the country emerges from COVID-19 controls to become the bright spot for Asian super-chilled fuel consumption.
Chinese demand is expected to rebound to between 70 and 72 million tonnes in 2023, 9 to 14% more than in 2022, according to analysts from Rystad Energy, Wood Mackenzie and ICIS.
But imports to China, which has the world’s second-largest economy, would likely fall below record highs in 2021 as prices remain high and the lingering effects of the pandemic curb appetite, they added.
These high prices would continue to suppress demand from China’s industrial and energy sectors, both of which are highly sensitive to energy costs, said Wei Xiong, principal analyst at Rystad Energy.
“Growth momentum across all sectors can only be restored after high infections abate and employees return to work,” she said. “It will be a gradual process and the restoration could take a few months.”
State energy officials have estimated that in 2022, China’s annual natural gas demand may have fallen for the first time in two decades, due to weak demand from industries disrupted by pandemic controls. .
China was the world’s largest LNG importer in 2021, but Japan held the position last year.
Gas prices soared last year after Russia cut off supplies to Europe following its invasion of Ukraine. This led Europe to import record amounts of LNG, pushing Asian spot LNG prices to historic highs.
$945 billion projects
Guangzhou, the manufacturing hub of southern China forecasts 1,722 projects in 2023 worth more than 6.5 trillion yuan ($945 billion), state media CCTV reported Thursday, after the city was hit with strict COVID-19 restrictions in late 2022.
In 2023 alone, 526.1 billion yuan is expected to be invested in projects covering areas such as transportation, new energy vehicles and biomedicine, according to the report.
Guangzhou’s infrastructure push echoes calls from policymakers to boost economic growth, which has been affected not only by COVID-19 outbreaks and strict restrictions, but also by a prolonged downturn in real estate and now by fading export prospects.
To revive growth, the authorities dusted off an old playbook, issuing debt to fund major public works projects.
The finance minister said the country would accelerate fiscal expansion appropriately in 2023 by boosting spending and investment through special local government bonds to stimulate the economy.
More than 480 transportation infrastructure projects have been scheduled by Guangzhou as the city aims to become an international transportation hub, CCTV said.
Chinese stocks had their best day in a month on Thursday as investors hoped for a strong economic recovery in 2023 overshadowed worries about a spike in COVID-19 as authorities pledged to support growth.
China’s blue-chip CSI 300 index closed up 1.9% and the Shanghai Composite index rose 1%. Both indices recorded their best daily performance since December 5.
Electric vehicle market
Chinese automakers can build an electric vehicle for €10,000 ($10,618) less than European automakers, a crushing cost advantage that will put pressure on European automakers in their home market, the supplier chief said Forvia automobile.
As European consumers seek out inexpensive electric vehicles, Forvia chief executive Patrick Koller told the CES convention in Las Vegas on Wednesday that China produces “good vehicles” and Europe will not be able to to stop imports.
The issue is “more dangerous” for Europe than for the United States, Koller told Reuters in an interview, because high duties have limited China’s market share in the United States.
While the average price of electric cars has increased in Europe since 2015 from €48,942 to €55.82 and from €53,038 to €63,864 in the United States, it has fallen in China to €31,829 from €66,819 , pushing it below the price of gas-powered cars, according to research by JATO Dynamics, which provides analysis of industry trends.