China’s monthly LNG offtake in October amounted to 5.37mmt, our data showed at the time of writing, which constituted negative monthly demand growth of 0.26mmt from the 5.63mmt we recorded in September.
Chinese demand during the reporting period of September and October of 11.0mmt thus decreased by 1.35mmt (-11 percent) from total imports of 12.35mmt during the preceding two-month reporting period of July and August 2023. China’s LNG imports in July and August stood at 6.16mmt and 6.19mmt, respectively. Accordingly, China’s annualised LNG import capacity utilisation during the current reporting period stood at roughly 59 percent, down 20pp from the previous reporting period of July-August. The amount imported during the reporting period nevertheless also constituted a robust increase of 1.32mmt (14 percent) from the 9.68mmt we recorded during the September-October period of 2022.
Prices
Our calculations based on Chinese customs data indicate an continued cooling-off of China’s landed LNG prices to an average of US$13.45/mmBtu during the reporting period of September-October, coming down from peaks of US$27.58/mmBtu in January and US$29.01/MMBtu in February. Accordingly, these not only represented a significant cooldown from even higher prices at around US$38.80/mmBtu in December 2022, but they also remained drastically below the high-water mark of US$49.32/mmBtu in August 2022.
China’s economy advanced by 4.9 percent year-on-year in Q3 2023, exceeding the market predictions of 4.4 percent and instilling optimism that it will achieve the government's annual target of approximately 5 percent this year, thanks to ongoing economic support from Beijing that counterbalanced the adverse effects of a protracted property market turmoil and sluggish trade.
Chinese domestic LNG prices began to trend higher in September and October whilst remaining far from their peak of US$27/mmBtu in March 2022 and a short spike to US$23.63/mmBtu in December 2022. In the current reporting period of September/October, the highest privately quoted domestic price had increased to US$14.62/mmBtu on 31 October. Accordingly, the average Chinese domestic LNG price during the reporting period increased to US$12.31/mmBtu.
Meanwhile, the average domestic price indicated by the National Bureau of Statistics (CNBS) stood at US$13.11/mmBtu for the first half of October (the most recent available dataset by the CNBS), which represents an increase of US$1.26/mmBtu (-11 percent) from US$11.85/mmBtu in September.
North China
LNG demand increased in the north of China during the reporting period up to 31 October, with offtakes up by 0.60mmt from 2.65mmt in the two months of July-August to 3.25mmt for the reporting period of September-October. The largest shares of LNG influx into the region during the reporting period took place via the Qingdao LNG terminal.
China’s North led by Caofeidian LNG
Leading the roster of northern terminals by volumes imported, Qingdao LNG took in 0.89mmt during the reporting period. This constituted an increase in offtakes by 0.19mmt (10 percent) compared to the previous two-month period. Imports consisted predominantly of four Australia Pacific LNG cargoes and four from PNG LNG. Deliveries were also made from Russia, Qatar and Indonesia.
Caofeidian LNG
Imports at Caofeidian LNG amounted to 0.88mmt, up 0.12mmt (21 percent) from 0.80mmt in July-August, according to our data. These imports were led by Russia, which was the source of five cargoes totalling 0.33mmt via Yamal LNG. Additionally, shipments amounting to 0.55mmt stemmed from Qatar, Australia and the United States.
Tianjin LNG
Tianjin LNG, meanwhile, had offtakes amounting to 0.54mmt over the reporting period compared to 0.69mmt in July-August. The terminal thus saw an import increase of 0.03mmt (5 percent). Cargoes comprised, inter alia, three shipments from Australia.
Tianjin – Nangang, Tianjin Binhai, Caofeidian Xintian LNG and Dalian LNG
The remaining four northern terminals – Tianjin – Nangang, Tianjin Binhai, Caofeidian Xintian LNG and Dalian LNG – imported 0.94mmt over the reporting period, respectively, which in the case of Tianjin - Nangang LNG stemmed predominantly from Qatar with 0.27mmt. The new Tianjin Binhai terminal’s imports amounted to 0.29mmt alongside 0.11mmt arriving at Caofeidian Xintian LNG.
September-October supply to Dalian LNG came entirely from Australia. The APLNG-derived CESI Tianjin supplied 0.07mmt
East China
At the time of writing, demand in East China was dominated by the wider Shanghai area, where Jiangsu LNG imported 1.10mmt during the reporting period. This placed the terminal second among China’s leading terminals in September-October. Accordingly, it operated at well-above nameplate capacity. Still, overall LNG demand in East China was down by 0.76mmt (-19 percent) period-on-period to 3.26mmt in September-October from the 3.26mmt we recorded in July-August.
Wider Shanghai area
The remaining wider Shanghai area – comprising Qidong LNG, Shanghai LNG, the metropolis’ peak-shaving facility as well as Pinghu LNG – imported a total of 0.61mmt over the reporting period. This was down 1.31mmt (-68 percent) from the 1.92mmt we recorded in July-August on account of lower offtakes at Shanghai LNG and the Qidong LNG’s market absence.
Yancheng LNG
The new Yancheng LNG facility did not continue to ramp up imports during the reporting period, with offtakes down by 0.34mmt (-44 percent) to 0.43mmt from 0.77mmt in July-August. The bulk of that supply came from Australia’s QCLNG and APLNG plants in addition to a total of four c argoes from Qatar and Russia’s Sakhalin-2 LNG.
Zhejiang & Zhoushan LNG
At the remaining regional terminals Zhejiang and Zhoushan LNG, imports amounted to 0.87mmt and 0.19mmt, respectively. Zhejiang LNG’s offtakes had thus decreased significantly by 0.11mmt (-11 percent) from 0.98mmt in July-August. Meanwhile, Zhoushan LNG decreased imports period-on-period by 0.12mmt (-39 percent) to 0.19mmt from 0.31mmt. LNG to Zhejiang LNG was mainly supplied by Qatar, with seven c argoes totalling 0.63mmt. Supply also came from Australia, Indonesia as well as a re-export from Shenzhen Diefu LNG. Zhoushan’s imports of 0.19mmt came from Australia’s Gorgon LNG i n addition to 0.08mmt from Sabine Pass LNG. Zhoushan is one of the few Chinese LNG import terminals not controlled by one of the s tate-owned petrochemical giants PetroChina, Sinopec and CNOOC (although that number has been growing this year).
Wenzhou LNG
During the July-August report period, the East China region saw the inauguration of China’s latest LNG terminal at Wenzhou city. The facility maintained its offtake level at 0.06mmt during September-October.
South China
Regional imports in South China – where LNG demand is primarily determined by the s outhern industrial clusters surrounding S henzhen – saw the most significant regional demand increase during the reporting period of September-October, our data showed. The region’s imports amounted to 4.49mmt over the reporting period, which meant they were down by 1.19mmt (-21 percent) from the 5.68mmt recorded in July-August.
Shenzhen terminals
South China’s imports were led by S henzhen’s active terminals – Guangdong Dapeng and Shenzhen Diefu LNG. The adjacent peak-shaving facility, on the other hand, continued its market absence. Notably, this was not true for the Dongguan LNG terminal, which had continued LNG offtakes, albeit only via re-exports from Hainan LNG totalling 0.04mmt. The region’s most prominent terminal – Guangdong Dapeng LNG (GDLNG) – saw offtakes of 1.48mmt, as usual placing it first among China’s terminals. At 1.48mmt, the terminal had slashed its September-October imports by 0.53mmt (-26 percent) from 2.01mmt during the previous two-month period. Guangdong Dapeng LNG’s average capacity utilisation stood at 55percent over the reporting period. Neighbouring Shenzhen Diefu LNG imported 0.45mmt and pegging its terminal utilisation at 38 percent.
Zhuhai and Jieyang LNG
Zhuhai LNG curtailed offtakes by 0.23mmt (-40 percent) to 0.35mmt over the reporting period from 0.58mmt the previous period. Unlike during previous reporting periods, the roster of Zhuhai’s LNG suppliers had shrunk and comprised in QCLNG and NWS LNG in Australia as well as Oman and Qatar.
In contrast to Zhuhai, Jieyang LNG also saw a decrease in imports during the September-October period. Offtakes were down by 0.05mmt (-8 percent) to 0.60mmt in September-October from 0.65mmt in July-August. Jieyang LNG previously set a historical marker as the first import node of China’s state-owned China Oil and Gas Pipeline Network (also known as PipeChina). PipeChina links the Jieyang terminal to Guangdong Province’s existing pipeline network and further to China’s massive West-East II and III trunklines. Between its commissioning in 2017 and the launch of PipeChina, the terminal had suffered from frequent periods without shipments arriving because its send-out options were mostly limited to truck loadings. Currently, China has six PipeChina terminals operating on the international market.
Fujian and Beihai LNG
In line with the overall demand decrease in the South China region, Fujian LNG also saw offtakes decrease in September-October. At 0.63mmt, imports were down by 0.03mmt (-5 percent) from the 0.66mmt recorded during the previous period. Accordingly, the terminal’s capacity utilisation still stood at 60 percent during the reporting period.
Beihai LNG also saw lower demand over the reporting period. Offtakes at the terminal had slumped by 0.46mmt (-67 percent) to 0.23mmt from 0.69mmt in July-August. The terminals’ annualised capacity utilisation stood at 46 percent for the reporting period.
Bauhinia Spirit FSRU and Nansha LNG
The CLP Power-operated Bauhinia Spirit FSRU offshore Hong Kong decreased imports by 0.01mmt (-8 percent) to 0.12mmt during the report period from 0.13mmt in July-August.
The Guangzhou Gas-operated Nansha LNG terminal also continued imports during the September-October period. The new 1 million tonnes per annum (mtpa) terminal in China’s Guangzhou Province commenced Phase 1 operations after receiving its 0.04mmt inaugural cargo via the Maran Gas Coronis on 8 August. During the report period, the terminal increased offtakes by 0.08mmt (200 percent) to 0.12mmt.
Hainan Island
The remaining two regional LNG terminals – Hainan LNG and the Hainan Transfer Station on Hainan Island – saw a considerable demand increase due to higher activity at the Hainan LNG terminal. Whilst the Transfer Station was not seen in the market and thereby effectively cut offtakes by 0.03mmt period-on-period, Hainan LNG increased imports by 0.10mmt (29 percent) to 0.45mmt in September-October from 0.35mmt in July-August. The terminal continued to take in supplies from a variety of international sources, comprising Russia, Australia, Malaysia and Algeria. Previously, supply to the terminal was limited to mostly re-exports from Beihai LNG. These re-exports stopped in October last year, our data indicate.
