Few aspects of society or industry have been untouched by the effects of Covid-19 (coronavirus) this year, and yet at the time of writing it is still only mid-April. The LNG business is no different. With more than seven months of the year still to play out and no end in sight as yet to the maelstrom of the Covid-19 pandemic, there is much yet to be learned about the full ramifications of this outbreak.
Already, it appears as though LNG demand in 2020 from the world’s three largest importers – China, Japan and South Korea – is now set to fall year-on-year. That’s according to a forecast in early April by ICIS (Independent Commodity Intelligence Services), which studies the global energy, petrochemical and fertiliser industries. It says LNG demand destruction, caused by the impact of the coronavirus pandemic, will cause imports to be lower in those three countries this year (compared to 2019), an analysis driven by ‘noticeably lower macroeconomic indicators’.
“The forecast weakness in over half of the world’s LNG import market for 2020 will only exasperate the current over-supply and keep pressure on key natural gas and LNG prices,” said ICIS LNG Analyst, Tom Marzec-Manser. “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.”
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