China’s LNG imports set for first big decline as demand wanes

China’s LNG imports set for first big decline as demand wanes

Gas use has fallen further this month as a COVID resurgence caused extended lockdowns across several manufacturing hubs, portending a potentially steep drop for the year, industry sources told Reuters.

Even for shipments arriving in July, industrial consumers are not placing orders, a Chinese trader said.

LNG imports will likely fall as much as 19% this year - by 1 to 15 million tonnes - in what would be the first sizeable drop since China began importing the gas in 2006, according to forecasts by S&P Global Commodity Insights, Wood Mackenzie and SIA Energy.

China's only full-year fall in LNG imports was a 1% decline in 2015.

'BUSINESS IS TERRIBLE'

Li Ruipeng, a gas retailer in the northern industrial city of Tangshan, said his clients - gas refuelling stations, steel mills and zinc-coating plants - are buying half the volume of a year ago.

"Business is terrible," said Li, who owns a 10-trailer fleet to distribute the fuel. Factories have been running "severely below capacity for nearly half a year", as companies reduced output during environmental checks by the authorities and for pollution curbs around February's Beijing Olympics, followed by the COVID lockdowns, Li said.

"High prices are another killer as many of my clients can't possibly