COMMODITIES MARKETS - Liquefied Natural Gas
As China pushes to improve its air qualities in its major cities by replacing coal with gas and natural gas, its LNG imports rocketed 48 per cent in 2017. It is expected that in 2018, China will continue to absorb large volumes of LNG. However, projections of LNG oversupply may be dragging down prices.
With various projects in Australia coming online and Qatar planning to increase its LNG production, there will be downward pressure on prices. Moreover, major Asian importers like Japan and South Korea are moving towards more flexible short term contracts rather than fixed long term contracts. This is also having an impact on the LNG prices when Japan and South Korea trade their excess LNG back into the market.