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Liquefied natural gas (LNG) demand is expected to drop in 2020 in China, Japan and South Korea, the three biggest importers of LNG in the world, Kallanish Energy reports
That assessment was released on Tuesday by the Independent Commodity Intelligence Services (ICIS).
It is forecasting that China 2020 LNG imports will fall to 58.1m tonnes, down 5.2% year on year, due to LNG demand destruction from the coronavirus pandemic.
Japanese imports will decline to 76.2m tonnes, down 1.1% year on year, and South Korean imports will fall to 38.5, tonnes, down 4.7% year over year.
“The forecast weakness in over half of the world’s LNG import market for 2020 will only exasperate the current oversupply and keep pressure on key natural gas and LNG prices,” said ICIS LNG analyst Tom Marzec-Manser in a statement.
“While Japan and South Korea have been contracting as LNG markets for a few years, a shrinking Chinese market will cause major headaches for those producers looking to find demand for their increasing output,” he said.
Noticeably lower microeconomic indicators have driven much of the downward revision, ICIS said.
Chinese LNG demand for 2020 s forecast at 58.1m tonnes, a drop of 3.2m tonnes on cargo arrivals in 2019.
In the first quarter 2020, imports to China have already fallen 4.6%, compared to the same period a year ago.
ICIS said it expects further declines over the year in China as gas inventories fill.
Japan, the world’s largest importer, is forecast to get 76.2m tonnes of LNG in 2020, down from 77.1m tonnes in 2019.
In 1Q 2020, the country’s LNG imports were down 2.6% year over year at 21.6m tonnes, indicating a revival later in the year, ICIS said.
It is forecasting that South Korean LNG imports this year will fall by 1.9m tonnes to 38.5m tonnes.
LNG imports in 1Q 2020 in South Korea were up sharply from 1Q 2019 driven by environmental policy that will have little impact over the rest of 2020, ICS said.
In 2019, Japan, China and South Korea collectively imported 179m tonnes of LNG which was 51% of the 354mt tonnes that were imported globally, it said.
