RIYADH: China’s liquefied natural gas demand is forecast to recover in 2023 as the country emerges from COVID-19 controls to become the bright spot in Asia’s consumption for the super-chilled fuel.
China’s demand is set to rebound to between 70 million and 72 million tons in 2023, 9 percent to 14 percent higher than in 2022, say analysts at Rystad Energy, Wood Mackenzie and ICIS.
But imports to China, which has the world’s second-largest economy, would likely fall short of record 2021 levels, because prices would stay high and lingering effects of the pandemic would limit appetite, they added.
Those high prices would continue to suppress demand from the Chinese industrial and power sectors, both highly sensitive to energy costs, said Wei Xiong, a senior analyst at Rystad Energy.
“Growth momentum across sectors may only be restored after the high infections subside and when employees are back to work,” she said. “It will be a gradual process and may take a few months to restore.”
State energy officials have estimated that in 2022 China’s annual demand for natural gas may have fallen for the first time in two decades, because of weak demand from industries disrupted by pandemic controls.
China was the world’s top LNG importer in 2021 but Japan held the position last year.
Gas prices spiked last year after Russia, following its invasion of Ukraine, cut supplies to Europe. This led Europe to import record amounts of LNG, pushing Asian spot LNG prices to historical highs.
China’s southern manufacturing hub of Guangzhou plans 1,722 projects in 2023 worth more than 6.5 trillion yuan ($945 billion), state media CCTV reported on Thursday, after the city was hit by stringent COVID-19 curbs in late 2022.
In 2023 alone, 526.1 billion yuan is expected to be invested in the projects which span areas including transport, new energy vehicles and biomedicine, the report said.
Guangzhou’s infrastructure push echoes policymakers’ calls to spur economic growth, which was hurt not only by COVID-19 outbreaks and strict restrictions, but by a protracted property downturn and now a fading exports outlook.
To revive growth, authorities have dusted off an old playbook, issuing debt to fund big public works projects.
The finance minister said the country would step up fiscal expansion in an appropriate manner in 2023 by boosting spending and investment via local government special bonds to spur the economy.
More than 480 transport infrastructure projects have been scheduled by Guangzhou as the city aims to build itself as an international transportation hub, CCTV said.
China stocks saw their best day in one month on Thursday, as investor hopes for a strong economic recovery in 2023 dwarfed worries over a COVID-19 spike, with authorities vowing to support growth.
China’s blue-chip CSI 300 Index closed up 1.9 percent, and the Shanghai Composite Index rose 1 percent. Both indexes logged their best daily performance since Dec. 5.
Chinese automakers can build an electric vehicle for €10,000 ($10,618) less than European automakers, an overwhelming cost advantage that will put pressure on European manufacturers in their home market, the head of auto supplier Forvia said.
As European consumers seek cheap EVs, Forvia Chief Executive Patrick Koller told the CES convention in Las Vegas on Wednesday that China was producing “good vehicles” and Europe would not be able to stop imports.
The issue is “more dangerous” for Europe than the US, Koller told Reuters in an interview, as high duties have limited China’s US market share.
While the average price of electric cars has risen in Europe since 2015 from €48,942 to €55,82 and €53,038-to-€63,864 in the US, it has dropped in China to €31,829 from €66,819, taking it below the price of gasoline cars, according to a study by JATO Dynamics, which provides analysis on industry trends.