RIYADH: China’s liquefied natural gas demand is forecast to recover in 2023 as the country emerges from COVID-19 containment to become a bright spot in Asia’s consumption for the super-chilled fuel.
Analysts at Rystad Energy, Wood Mackenzie and ICIS say Chinese demand is set to rebound to between 70 million and 72 million tonnes in 2023, up 9 percent to 14 percent from 2022.
Imports into China, the world’s second-largest economy, are likely to fall below record levels in 2021 as prices remain high and the impact of the pandemic limits appetite, they said.
Wei Xiong, a senior analyst at Rystad Energy, said higher prices will continue to depress demand from the Chinese industrial and power sectors, both highly sensitive to energy costs.
“The pace of growth in all sectors can be restored only after the high infection rate subsides and employees are back to work,” he added. “It will be a gradual process and it may take some months to be restored.”
State energy officials have forecast that China’s annual demand for natural gas could fall for the first time in two decades in 2022 due to weak demand from industries hampered by pandemic controls.
China was the world’s top LNG importer in 2021, but Japan took the position last year.
Gas prices spiked last year after Russia cut supplies to Europe following its invasion of Ukraine. This prompted Europe to import record amounts of LNG, pushing Asian spot LNG prices to historic highs.
$945bn projects
China’s Southern Manufacturing Center of Guangzhou 1,722 projects planned in 2023 Worth more than 6.5 trillion yuan ($945 billion), state media CCTV reported on Thursday, after the city was hit by stricter COVID-19 restrictions until late 2022.
In 2023 alone, 526.1 billion yuan is expected to be invested in projects that span sectors including transportation, new energy vehicles and biomedicine, the report said.
Guangzhou’s infrastructure echoes policymakers’ call to spur economic growth, which was hurt not only by the COVID-19 outbreak and tighter restrictions, but also by a protracted property slump and now a fading export prospect .
To revive growth, the authorities have dusted off an old book, issuing loans to finance large public works projects.
The Finance Minister said that the country will pursue fiscal expansion in an appropriate manner in 2023 by boosting spending and investment through local government special bonds to spur the economy.
CCTV said more than 480 transport infrastructure projects have been earmarked by Guangzhou as the city aims to build itself into an international transport hub.
shares
China shares saw their best day in a month on Thursday as investors hoped for a strong economic recovery in 2023, dwarfing concerns over a COVID-19 spike as officials vowed to support growth.
China’s blue-chip CSI 300 index closed up 1.9 percent and the Shanghai Composite index rose 1 percent. Both the indices posted their best daily performance since December 5.
EV market
Chinese automakers can build an electric vehicle for €10,000 ($10,618) less than European automakers, a huge cost advantage that will pressure European makers in their home market, the head of auto supplier Forvia said.
As European consumers seek cheaper EVs, Forvia Chief Executive Officer Patrick Koller told the CES conference in Las Vegas on Wednesday that China was producing “good vehicles” and that Europe would not be able to stop imports.
Koller told Reuters in an interview that the issue is “more dangerous” for Europe than for the US, as higher duties limit China’s US market share.
While the average price of electric cars in Europe has risen since 2015 from €48,942 to €55,82 and in the US from €53,038 to €63,864, it has fallen from €66,819 to €31,829 in China, taking it down to the price Is. The number of gasoline cars, according to a study by JATO Dynamics, which provides analysis on industry trends.