China LNG Imports Reached 3.99 Mt in February

According to official data issued by CGAC (China General Administration of Customs), the LNG import volume reached 3.99 million tons in February, down 23% M-O-M but up 68% Y-O-Y, and this created the new February import record.

Herein, the new terminal, Sinopec Tianjin Terminal received 110 kt of LNG from APLNG’s LT contract in February. Except SNOOC Yuedong Terminal, all 17 terminals had imports in this month. CNPC Rudong, CNPC Caofeidian and Sinopec Qingdao ranked top three.

In February, imports from Australia reached 1.63 million tons, ranked first at 41% of the total, and the overall import price averaged at $452/mt, up 4% M-O-M and 24% Y-O-Y, caused by seasonal peak and strong crude price.

China’s longest holiday Lunar New Year was in mid-February, and the domestic demand was soft in and after the holiday. Many downstream industrial consumers remained shutdown or resumed operation at a slow pace in late February. Meanwhile, the temperature was warmer and warmer, reducing the residential demand for LNG. Overall, the domestic LNG market was stagnant, and the import enthusiasm cooled down from January’s historical high accordingly.

On the other hand, from one year ago, there were three newly added LNG receiving terminals in China, namely CNPC Rudong, Guanghui Qidong and Sinopec Tianjin, and China’s receiving capacity increased by 7.1 Mtpa to 54.67 Mtpa by the end of February 2018. Meanwhile, the utilization rate of China’s LNG terminals boosted significantly from previous years from less than 50% level to above 75% level. Together with the rapidly expanding market basis, China’s LNG import volume increased noticeably from one year ago by 68% Y-O-Y.

From March, the off-peak season is coming, and China’s import pattern is estimated to remain the same as in February. The import volume will drop from the peak season with no doubt, but the absolute volume will exceed the previous years’ level by a large increment.