"According to Fitch Solutions" according to the article. Which means it ain't official, and if we want to hear the fat lady sings, we want to hear it from her mouth, and not from someone else.
Chinese Economics Thread
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"According to Fitch Solutions" according to the article. Which means it ain't official, and if we want to hear the fat lady sings, we want to hear it from her mouth, and not from someone else.
unwise unless LNG is priced sky high to export inflation.
why would they sell natural gas, when they need to hoard more to prepare for further unreasonable sanctions and Taiwan situation?
It isn't worthwhile to store natural gas long term.
One thing is worth noting, "the average price of imported LNG, including forward and spot cargoes, was estimated at US$18.93/MMBtu in December 2021, an increase of 7% on the month, and more than triple the price of imported pipeline gas, calculations showed. Lower prices compared to spot LNG contributed to growth in pipeline gas imports from China. China imported 7.63 million tonnes of LNG in December 2021 , up 0.5% year-on-year and up 10.5% month-on-month, customs data showed.The average price of pipeline gas imported into China was estimated at US$6.15/MMBtu in December 2021, slightly down from $6.22/MMBtu in the previous month.
The average price of imported LNG rose for eight consecutive months in December 2021, increasing 170.8% from the value in April of the same year, while the average price of imported pipeline gas in December rose by only 34.3% over the same period. , according to Platts' calculations."
China is now the world's largest LNG importer, surpassing Japan last year, which had held that title since 1970.
China depends on the lowest price for LNG because it has many short-term contracts, this surplus sale from China can ease prices in the short term to get more advantageous payment values.
“The largest pipeline gas imports in December were mainly driven by flows from Russia and Kazakhstan. China imported 898,182 tonnes of pipeline gas from Russia in December 2021, an increase of 24.3% year-over-year and 29, 2% higher month-on-month, while pipeline imports from Kazakhstan also increased by 30.9% year-on-year and doubled from November 2021 levels, the data showed.
On December 14, 2021, Gazprom said that the daily amount of gas exports to China had increased significantly under agreements with CNPC, exceeding previously approved volumes for 2021.
PetroChina previously said it would increase natural gas imports from Russia through the Power of Siberia pipeline to 43 million cubic meters/day by the end of 2021 from 28 million cubic meters/day to help meet winter demand. from China. It also signed a short-term agreement to purchase natural gas for October-March delivery through the China-Central Asia pipeline.
These deals have boosted China's winter pipeline gas imports and volumes that could increase further as Gazprom said it would continue to increase natural gas exports to China in 2022, in line with the supply contracts. "
As the proportion of LNG in China's gas supply increases, there is an urgent need to introduce a local pricing system that better reflects the fundamentals of the LNG market. This will inevitably have an impact on the traditional supply model, which is based on long-term contracts and the “take or pay” principle. As the price of LNG in long-term contracts is linked to other bulk commodities, this pricing system can result in a gap between the contract price at the time of signature and the market price at the time of delivery.
In a market with strict supervision and monopoly, the risk of a price difference between the long-term contract price and the market price is still manageable. However, in a market where downstream competition is becoming fiercer, and international spot market fundamentals and prices are becoming significant, the risks of price differences will increase.
This phenomenon in China is gradually challenging the traditional global LNG supply model, and the market prefers an independent pricing contract model, which is short-term, flexible and small-amount, not tied to other related bulk commodities.
It is worth noting that by 2019, China had built 21 LNG terminals in the country, with an annual reception capacity of 80 million metric tons, and imported more than 230 million tons of LNG, making a remarkable contribution to the prosperity of the world industry. of LNG. At the time, CNOOC had 10 LNG terminals in operation, with an annual reception capacity of 45.2 million tons, however, the company intensively promoted the expansion of existing LNG terminals and the creation of new projects. Therefore, the import exceeds China's LNG stock capacity figures, it makes no sense to keep prices high in the international market based on the claim that sanctions will occur if the costs of LNG imports to the Chinese are aggravating the situation in the long run. industry term.
Maybe China can become a transit country/market for Russian gas when more Power of Siberia capacity is available.
Why not China will pretty much become the economic and logistic hub of Asia.
Why not China will pretty much become the economic and logistic hub of Asia.
Lethe
Captain
Recent discussions led me to take another look at the IMF's projections for PRC and USA economic growth over the next few years. Another update is due in a few days which should extend the horizon to 2027, but at the moment the IMF is China's GDP (nominal, USD@MER) to be 85.8% of USA's in 2026, up from 60% in 2016 and 73.5% in 2021.
Well, IMF projected that the Chinese economy will be $16.64 trillion in 2021 and it was actually $18 trillion. Most likely China will be 75-76% of the US economy in 2021. Besides, any long-term projections are not really reliable - even next year predictions are usually revised several times throughout the year to become more or less accurate.