A wave of freezing weather is sweeping across Asia and will likely boost energy demand on the continent as the thermometer plunges deep below zero.
Per Bloomberg, northern China saw temperatures of a record -53 degrees Celsius, equal to -64 F, and Seoul saw temperatures drop to -16 Celsius this week. The cold snap is forecast to remain in place until the end of the month.
In Mohe, northern China, where the record low temperature was measured, coal consumption has already increased by some 33 percent as utilities ramp up boiler activity to cope with the surge in demand for heating, Bloomberg noted.
Yet the overall effect of the weather may not be particularly significant, at least in China, where businesses are closed for the Lunar New Year holiday.
China, South Korea, and Japan—the three countries expected to bear the brunt of the cold snap—are all leaders in energy imports, with demand strongly exceeding domestic supply, especially in Japan’s case.
All three are among the leading importers of LNG, which has been tight recently as Europe rushed to stock up on gas after sanctions following Russia’s invasion of Ukraine prompted an in-kind response from Moscow and reduced gas flows.
“LNG procurement competition has been intensifying and thus, stable procurement of fuel in a timely manner in line with the domestic electricity supply-demand situation is needed to secure a stable supply of energy in Japan,” JERA, the country’s biggest LNG importer, in comments on a recent supply deal with Oman.
China, meanwhile, has been betting on long-term commitments and has come to account for as much as 40 percent of all long-term LNG contracts, Nikkei Asia reported today.
South Korea, the world’s third-largest LNG importer after Japan and China, could also need to step up its purchases amid the cold spell after a mild winter that brought down demand earlier this year.
By Charles Kennedy for Oilprice.com
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