LNG demand to decline in east China; prices expected to drop

17 January 2013 09:30  [Source: ICIS news]

SINGAPORE (ICIS)--Demand for liquefied natural gas (LNG) from the peak-shaving and industrial end-user sectors in east China is expected to drop from 20 January onwards because of the Lunar New Year holiday, LNG traders said on Thursday.

LNG demand for peak-shaving purposes in east China was robust in late 2012, as piped gas supply tightened during winter, which is typically the peak consumption period in the country.

However, many manufacturers in the industrial sector will start reducing or suspending their plant operations in preparation for the upcoming Lunar New Year holiday in the first half of February, according to the traders.

This will result in weakened demand for piped gas and LNG from industrial manufacturers before and during the Lunar New Year holiday, the traders said.

Consequently, there will be sufficient supply of piped gas for other sectors and liquefaction plants, which will lead to higher domestic LNG output as LNG producers can raise their operating rates, the traders said.

Prices of LNG in east China are expected to decline in late January, because of rising domestic supply and falling demand, the traders said.

Spot LNG cargoes were traded at yuan (CNY) 5,800-6,100/tonne ($932-981/tonne) on a truck-delivered basis in east China on 16 January, according to the traders.

($1 = CNY6.22)

By: Rita Huang
+65 6780 4327

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