China’s energy giants sell natural gas to the World for Supply

(Bloomberg) — China’s biggest energy groups are diverting more liquefied natural gas away from their sagging domestic market, offering some relief to desperate buyers suffering from supply shortages elsewhere in the world.

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

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

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

China’s silence on LNG hides the risk that could upend the global market

Even smaller Chinese LNG importers such as ENN Energy Holdings Ltd. and JOVO Group, are actively offering to sell consignments for delivery to ports in Asia, traders said.

Events today

Today’s chart

Lithium prices in China are nearing all-time highs, in a sign that a global shortage of the material used in lithium-ion batteries is not abating. Lithium carbonate is selling for nearly 500,000 yuan ($72,090) a tonne, according to data from Asian Metal Inc. China’s government last week said it plans to set up a monitoring mechanism aimed at stabilizing the prices of raw materials, including lithium and rare earths.

On The Wire

China said it would accelerate the implementation of stimulus in the third quarter as it tries to recover from a second quarter marred by pandemic-related losses. It is “critically 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, September 7

  • China’s foreign exchange reserves for August, including gold

  • China’s 1st batch of trade data for August, incl. steel, aluminum and rare earth exports. imports of steel, iron ore & copper. imports of soybeans, edible oils, rubber and meat and by-products; imports of oil, natural gas and coal; imports and exports of petroleum products. ~ 11:00

Thursday, September 8

Friday, September 9

  • China August Inflation Data, 09:30

  • Weekly China Iron Ore Port Inventories

  • Shanghai weekly commodity exchange stock, ~15:30

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