China begins winter gas buying spree at the worst possible time

China begins winter gas buying spree at the worst possible time

China is escalating its purchases of liquefied natural gas (LNG) for the winter, exacerbating a global supply shortage and leaving less fuel for energy-parched Europe.

China is struggling to secure enough coal to power factories and heat homes this winter, as the world’s second-biggest economy faces a potential energy-crunch scenario similar to the chaos gripping Europe. That’s spurred some of the nation’s energy giants, such as state-owned Sinopec, to dive back into the LNG spot market, seeking shipments of the heating fuel in preparation for when temperatures turn colder.

Natural gas prices from Europe to Asia have surged to seasonal highs as the post-pandemic recovery collides with supply constraints. The situation was already strained by China’s insatiable appetite for LNG to fuel its economic rebound — it is poised to overtake Japan as the world’s top importer of the fuel this year.