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China’s Energy Giants Sell Gas to World Scrambling for Supply

China’s Energy Giants Sell Gas to World Scrambling for Supply

 

China’s biggest energy groups are diverting more liquefied natural gas away from their languishing home market, offering some relief to desperate buyers suffering supply shortages in other parts of the world.

Cnooc is offering to sell an LNG cargo for November loading from the North West Shelf export project in Australia, according to traders with knowledge of the matter. That comes after other major shippers, including Sinopec and PetroChina Co., sold several LNG shipments from US projects to energy-starved Europe throughout the year, traders said.

The supplies should provide modest respite for natural gas markets rocked by Russia halting a key pipeline to European customers. Natural gas prices in Europe and Asia are trading at an all-time high for this time of year, forcing governments to consider unprecedented steps to protect businesses and consumers.

China was the world’s top LNG buyer in 2021, but the nation’s strict Covid Zero policies and economic slowdown mean demand has slumped more than 20% this year. The divergence between China and the rest of the world means global buyers are willing to pay much higher rates.

Even smaller Chinese LNG importers, such as ENN Energy Holdings Ltd. and JOVO Group, have been actively offering to sell shipments for delivery to ports in Asia, traders said.
Events Today

  • No major events

Today’s Chart

Prices for lithium in China are approaching their highest ever, in a sign that the global shortage of the material used in lithium-ion batteries isn’t easing. Lithium carbonate is selling at almost 500,000 yuan ($72,090) a ton, according to data from Asian Metal Inc. China’s government last week said it’s planning to set up a monitoring mechanism aimed to stabilizing prices for raw materials including lithium and rare earths.

Markets Latest

 
Copper +1.3% in Shanghai Crude oil +0.8% in Shanghai
Aluminum +0.7% in Shanghai Nickel +5.2% in Shanghai
Iron ore +1.3% in Dalian Steel rebar +0.6% in Shanghai
Thermal coal +1.2% Coking coal -0.3% in Dalian
Live hogs -0.7% in Dalian Corn +0.8% in Dalian

On The Wire

China said it will accelerate its stimulus rollout in the third quarter as it tries to recover from a second quarter marred by pandemic-related losses. It’s “crucially important” for the country to adopt supportive policies this quarter, Yang Yinkai, deputy secretary general at the National Development and Reform Commission, told reporters in Beijing on Monday. 

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The Week Ahead

Wednesday, Sept. 7

  • China foreign reserves for August, including gold
  • China’s 1st batch of Aug. trade data, incl. steel, aluminum & rare earth exports; steel, iron ore & copper imports; soybean, edible oil, rubber and meat & offal imports; oil, gas & coal imports; oil products imports & exports. ~11:00

Thursday, Sept. 8

  • No major events/announcements

Friday, Sept. 9

  • China inflation data for August, 09:30
  • China weekly iron ore port stockpiles
  • Shanghai exchange weekly commodities inventory, ~15:30
Published: 06-09-2022

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