Asia is in no hurry to buy LNG

Sergey Kondratiev, Principal Director on Economic Studies of the Institute for Energy and Finance, commented to the Kommersant newspaper on LNG supplies to Asia.

Sergey Kondratiev notes that demand for LNG in East Asia remains weak in 2023, partly due to the slowdown in the economies of the countries of the region. Thus, in the first quarter of 2023, industrial production in China grew by only 3.9% yoy, in Japan it fell by 2% yoy, in South Korea — by more than 9% yoy. The industry remains one of the main consumers of energy resources in these countries, and the weak performance of the sector (including due to reduced exports to the US and the EU) negatively affects energy demand.

“It is likely that in the coming months we can return to a situation where the Asian market will be premium for LNG producers, and prices in the EU will be lower than in Asia. This can also be evidenced by the redirection of LNG flows from the US to the Asia-Pacific region: in March 2023, supplies from the US to China increased by 3.8 times,” the analyst says.