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4 days ago
- Business
- Yahoo
LNG Slowdown in Asia Masks a Bigger Surge Ahead
Demand for liquefied natural gas from the biggest importing region—Asia—has remained strong this year, although it has experienced a certain softening compared to last year. Prices are to blame for the softening—and they're about to slide lower and reverse the demand trend. Asian LNG importers bought 112.45 million tons of LNG over the first five months of the year, Reuters' Clyde Russell wrote this week, citing data from Kpler. This was down 6.2% on the first five months of 2024. and most of the decline came from China, which sunned pricy spot market LNG. In May alone, however, LNG shipments to Asian countries inched higher than they were in April, although the total figure remained lower than the total for May last year. The reason was probably the same as the reason for the lower five-month imports: prices. LNG prices trended higher earlier this year than last mostly because of Europe. After two mild winters, Europe assumed its demand for gas—and LNG specifically—was more or less set, but it wasn't. The winter of 2024/25 was colder than the two last ones, and demand for gas surged, leading to a corresponding surge in imports, which, in turn, pushed international spot market prices higher. At one point, the supply situation got so grave that Europe had to divert LNG cargos from Australia and Oman, not to mention its record purchases of Russian LNG, which the European Union has been trying to give up. This is about to happen again later this year, by the way. Europe, as well as Asia, will need to stock up on gas for next winter season—except perhaps has been building its natural gas stocks conscientiously ever since its 2017 gas crunch, which saw parts of the country lose power and heating due to the premature switch from coal to gas without securing enough supply. Eight years on, China had comfortable levels of gas in stock and a trade beef with the U.S., so its LNG imports over the first quarter of 2025 fell to the lowest in five years. A mild winter helped as well. The trend continued in the second quarter as well, with Chinese LNG imports seen 20% lower in April 2025 than they were in April 2024. This is dragging Asia's total lower and, for some, creating the impression that overall LNG demand in the biggest importing region is going down on a sustainable curve because of alternative energy sources. This, however, is not exactly the case, and China is the best illustration. The world's biggest wind and solar investor, home to the biggest capacity of both by far continues to be also one of the largest gas importers in the world. China's alternative energy growth keeps breaking record—and gas imports remain substantial despite the annual drop attributable to weather patterns and solid stockpiling. Europe is another illustration of the robustness of the international gas market. Earlier this month, the continent saw a sudden jump in gas prices because of a production outage at a Norwegian offshore platform. Europe, like China, is betting a lot on alternative energy sources. Yet despite a surge in capacity, it still, like China, remains very much dependent on gas, as shown by the price spike following the outage at the Troll field. Meanwhile, LNG prices are about to move higher after their slide earlier in the year. At the start of May, the spot price fell to $11 per million British thermal units, but since then, it has climbed to $12.40 per mmBtu, as of the week to May 23. As Reuters' Russell points out in his column, this is probably due to supply constraints as Chevron's Wheatstone LNG plant entered maintenance and Freeport LNG in the U.S. experienced yet another outage. Demand is about to start climbing as well. One reason is the seasonal peak in demand that comes with higher summer temperatures in the northern hemisphere. The other is, yet again, Europe and its gas storage refill drive, which occurs regularly in the middle of the year. This year, Europe will need to buy more gas than in the last two. The winter of 2024/25 depleted its stocks, and President Trump has demanded more LNG purchases to shrink the EU's trade surplus with the United States. Currently, Europe's gas stocks are at around 47%, but this will need to rise substantially ahead of next winter. LNG purchases in Asia will pick up as well, with Trump's crusade against what he sees as trade injustice adding to demand drivers over the next few months. So, while Asia's demand for liquefied gas may be experiencing a lull, it is a temporary lull. There are simply very few alternatives that are on par with gas as a primary source of energy. By Irina Slav for More Top Reads From this article on
Yahoo
22-05-2025
- Business
- Yahoo
Electricity Demand Defies China Slowdown Fears
China's economy is set to grow at lower rates than previously expected as the U.S.-China trade war will take its toll on the GDP of the world's second-largest economy after the United States. Yet, figures about Chinese power generation and consumption haven't dropped—consumption has even held strong at the start of the year. The manufacturing sector, which accounts for two-thirds of China's power demand, continues to grow, but growth slowed in April to 6.1% from a year earlier, from a 7.7% increase in March. The real impact of the trade and tariff war is set to be felt in the coming months. For now, China's economy appears to be not as gloomy as feared. Power consumption shows resilience, and certain figures in the electricity sector support the view that Chinese growth may not be as soft as predicted. Some data points in the electricity sector show a more resilient Chinese economy than previously expected. China's growth in electricity generation, in particular, doesn't look weak at all, considering a warmer winter with lower power demand and the fact that official Chinese statistics exclude small-scale electricity generators and residential rooftop solar, Reuters columnist Clyde Russell from the National Energy Administration (NEA) of China showed that the country's power consumption rose at a much higher rate compared to the power generation growth in figures by the National Bureau of Statistics (NBS). In March, China's power consumption rose by 4.8%. The pace of growth held in April, too, with power demand up by 4.7%. Chinese use of electricity increased to 772.1 billion kilowatt-hours (kWh) in April, according to the National Energy Administration. Electricity consumption in the primary and secondary industries increased by 13.8% and 3% year on year, respectively, while power demand in the services sector rose by 9%, according to China's official data. Total power consumption also rose in the first four months of the year, by 3.1% from a year earlier. Power demand is often viewed as a key indicator of a manufacturing-oriented economy. So far this year, China's electricity generation and consumption signal that the effects of the trade war will be seen further down the road. The fact that small-scale generators and residential rooftop solar are not included in generation data could suggest that the Chinese power sector could be stronger than it appears to be. China installed a record 60 gigawatts (GW) of new solar photovoltaic (PV) capacity in the first quarter of 2025 – the highest ever recorded in a first quarter in the country's history, Rystad Energy said in new research last week. Rooftop PV accounted for 60%, or 36 GW, of that total, marking the largest quarterly capacity addition for distributed PV in China's history. Rystad Energy also believes that the surge in rooftop PV installations will continue into the second quarter of the year, pushing total distributed solar capacity additions for 2025 to 130 GW, comprising 92 GW from commercial and industrial (C&I) projects and 38 GW from residential projects. Chinese industrial output rose by 6.1% in April, beating analyst estimates of 5.5% growth. This signaled that the effects of the U.S. tariffs – now at 30% during the 90-day trade truce announced last week – were not as severe as expected, at least for now. Sure, most uncertainties remain even after the U.S.-Chinese agreement to pause the 100%-plus tariffs on each other's goods. Even the Chinese national statistics bureau said, 'We should be aware that there are still many unstable and uncertain factors in [the] external environment.' Uncertainty is the keyword in all economic and global energy and oil demand analyses in recent months. China appears to be handling the initial tariff shock well, but the next few months will show where the world's second-biggest economy is headed. By Tsvetana Paraskova for More Top Reads From this article on
Yahoo
13-05-2025
- Business
- Yahoo
The Real Reason China is Buying More Oil
China has accelerated crude oil imports in March and April, but the increased purchases this spring aren't necessarily a sign of recovering fuel demand in the world's biggest crude importer. It's more likely that Chinese refiners are aggressively stockpiling cheaper crude amid uncertainties about sanctioned barrels going forward, analysts say. In April, Chinese crude oil imports rose by 7.5% from a year earlier to 11.69 million barrels per day (bpd), China's customs data show. March also saw strong crude imports—Chinese imports topped 12 million bpd in March, the highest volume since August 2023, as flows of Iranian and Russian crude rebounded from the lows seen early this year with the U.S. sanctions. However, the strong March and April crude imports signal continued stockpiling at Chinese refineries and strategic storage, rather than an acceleration in demand, according to estimates by Clyde Russell, a Reuters columnist. Since China doesn't report oil inventories, Russell has calculated the rate of stockpiling or stock draws based on official Chinese data of imports, domestic production, and refinery processing rates. These calculations showed that China likely stockpiled 1.74 million bpd in March, and continued stockpiling crude in April. 'Uncertainty and lower oil prices prompt aggressive stockpiling by Chinese majors, while sanctioned crude imports hold near record highs,' Emma Li, senior market analyst at Vortexa, wrote in an analysis last week. Crude stock builds in China's onshore tanks accelerated significantly through April. The average rate of stock builds exceeded 1.1?million bpd over the five weeks ending May 4, Vortexa's data showed. The surge in China's seaborne crude imports in April 'was initiated by concerns over potential supply disruptions amid tightening US sanctions, prompting Chinese refiners to ramp up bookings and bolster onshore inventories.' Falling oil prices over recent months are likely to support and prolong this pattern, Li added. The rate of utilization of crude tanks owned by China's majors was 62% in April, which suggests ample capacity remains for further stockpiling. Inventory builds are expected to continue into the third quarter amid the ongoing seasonal refinery maintenance and strategic restocking, Li noted. By Tsvetana Paraskova for More Top Reads From this article on Sign in to access your portfolio
Zawya
20-02-2025
- Business
- Zawya
A tungsten-tipped answer to the West's critical metals dilemma: Andy Home
LONDON - The critical minerals war is escalating. China's response to U.S. President Donald Trump's 10% tariff hike on Chinese imports includes restricting exports of another five esoteric components of the periodic table. Exports of bismuth, indium, molybdenum, tellurium and tungsten will only be allowed subject to Ministry of Commerce approval they will not be used in military applications. That's a big problem for tungsten in particular. In a world where just about every metal is critical for someone, the word may be losing its meaning, as my colleague Clyde Russell has argued. But, for want of a better word, tungsten is a critical component of the 21st-century industrial supply chain, both civilian and military. So critical indeed that users are starting to embrace new pricing mechanisms to guarantee non-Chinese supply. GREEN AMMO Tungsten has the highest melting point of any element, is extremely hard and has good electrical and thermal conductivity. The metal lit up the last century in the form of the incandescent light bulb and is now used in an extraordinarily wide range of applications. Tungsten carbide is the hardest material after diamond and its use in drills spans every other metallic supply chain from mine to machining. Tungsten crucibles make it possible to melt just about any other element. The metal has seeped stealthily into telecoms, electronics, semiconductor and power sectors. Tungsten is a small market with global output of just over 100,000 metric tons and an estimated value of around $5 billion in 2023. But the industries that depend on it are exponentially bigger, which is why it is on everyone's critical mineral list. It is also the material of choice for what the military calls penetrators - high-density, armour-piercing projectiles. The only other material that can match its kinetic performance is depleted uranium, which makes tungsten the environmentally friendly battlefield option. And one that is in high demand in Ukraine. DECOUPLING China dominates the tungsten market, accounting for 83% of last year's global mine production of 81,000 tons, according to the U.S. Geological Survey. Tungsten has not been mined commercially in the United States since 2015 and the country relies heavily on imports, 37% of which came from China last year. The Joe Biden administration kick-started the process of weaning U.S. companies off their dependence on Chinese tungsten with a 25% duty on imports from China imposed in December last year. The U.S. military faces a 2027 deadline for halting any purchases of tungsten manufactured or mined in China or Russia, which is the world's third largest producer. The Defense Logistics Agency holds stocks of tungsten concentrate and is in the market for up to 2,040 tons more in the current fiscal year to September 2025. The Department of Defense has awarded $15.8m to Canada's Fireweed Metals Corp to accelerate the development of the Mactung tungsten mine in Yukon. The money will fund test work and a feasibility study, which suggests it will be a while before a final go-ahead decision, let alone production. NO DOWNSIDE Until the DoD's money can deliver results in Yukon, the West's tungsten fortunes hang largely on the restart of the Sangdong mine in South Korea. Sangdong was once the jewel in the country's mining crown but closed due to low prices in the 1990s. It is being reactivated by Almonty Industries with commissioning of the first 2,300-ton per year phase already in progress. A second phase of similar size could follow 12 months down the line. All of the first-phase production has been committed to Global Tungsten & Powders, the U.S. arm of Austria's Plansee Group. The contract comes with a minimum floor price of $235 per metric ton unit (mtu) basis the price of ammonium paratungstate and no upside cap. The current price is $342.50 per mtu. Floor prices are by no means uncommon in the mining industry but normally they come in the form of fancy financial hedging programmes paid for by the producer. But there is no futures market in tungsten, which makes this particular contract unique - or almost unique: Almonty has pulled off the same trick with its Sangdong Molybdenum project, locking in a hard floor price of $19 per lb with SeAH M&S, Korea's largest processor. The idea is to insulate the projects from the sort of destructive Chinese supply surge that is playing out in battery metals such as lithium, cobalt and nickel. Lacking any floor price protection, battery-metal start-ups have been crushed by low prices. AT ANY COST? Almonty may not have to worry too much about floor prices if China starts choking off the supply of tungsten products to the West. Although there is no outright ban yet, it is worth noting that germanium, gallium and antimony all got the special licensing treatment before Beijing put a total ban on exports of all three to the United States. As buyers scramble for non-Chinese material at any price, antimony has rocketed to $47,250 from $11,000 per kilogram at the start of 2024. Plansee Group's granting of what is in effect a free put option on Amonty's tungsten output bears testimony to how critical it thinks Sangdong's output will be to the non-Chinese tungsten market. The lesson for other critical mineral users is that relying on market prices alone to ensure supply will not guarantee you get the stuff you really need. The opinions expressed here are those of the author, a columnist for Reuters. (Editing by Barbara Lewis)
Reuters
19-02-2025
- Business
- Reuters
A tungsten-tipped answer to the West's critical metals dilemma: Andy Home
LONDON, Feb 19 (Reuters) - The critical minerals war is escalating. China's response to U.S. President Donald Trump's 10% tariff hike on Chinese imports includes restricting exports of another five esoteric components of the periodic table. Exports of bismuth, indium, molybdenum, tellurium and tungsten will only be allowed subject to Ministry of Commerce approval they will not be used in military applications. That's a big problem for tungsten in particular. In a world where just about every metal is critical for someone, the word may be losing its meaning, as my colleague Clyde Russell has argued. But, for want of a better word, tungsten is a critical component of the 21st-century industrial supply chain, both civilian and military. So critical indeed that users are starting to embrace new pricing mechanisms to guarantee non-Chinese supply. GREEN AMMO Tungsten has the highest melting point of any element, is extremely hard and has good electrical and thermal conductivity. The metal lit up the last century in the form of the incandescent light bulb and is now used in an extraordinarily wide range of applications. Tungsten carbide is the hardest material after diamond and its use in drills spans every other metallic supply chain from mine to machining. Tungsten crucibles make it possible to melt just about any other element. The metal has seeped stealthily into telecoms, electronics, semiconductor and power sectors. Tungsten is a small market with global output of just over 100,000 metric tons and an estimated value of around $5 billion in 2023. But the industries that depend on it are exponentially bigger, which is why it is on everyone's critical mineral list. It is also the material of choice for what the military calls penetrators - high-density, armour-piercing projectiles. The only other material that can match its kinetic performance is depleted uranium, which makes tungsten the environmentally friendly battlefield option. And one that is in high demand in Ukraine. DECOUPLING China dominates the tungsten market, accounting for 83% of last year's global mine production of 81,000 tons, according to the U.S. Geological Survey. Tungsten has not been mined commercially in the United States since 2015 and the country relies heavily on imports, 37% of which came from China last year. The Joe Biden administration kick-started the process of weaning U.S. companies off their dependence on Chinese tungsten with a 25% duty, opens new tab on imports from China imposed in December last year. The U.S. military faces a 2027 deadline, opens new tab for halting any purchases of tungsten manufactured or mined in China or Russia, which is the world's third largest producer. The Defense Logistics Agency holds stocks of tungsten concentrate and is in the market, opens new tab for up to 2,040 tons more in the current fiscal year to September 2025. The Department of Defense has awarded $15.8m, opens new tab to Canada's Fireweed Metals Corp (FWZ.V), opens new tab to accelerate the development of the Mactung tungsten mine in Yukon. The money will fund test work and a feasibility study, which suggests it will be a while before a final go-ahead decision, let alone production. NO DOWNSIDE Until the DoD's money can deliver results in Yukon, the West's tungsten fortunes hang largely on the restart of the Sangdong mine in South Korea. Sangdong was once the jewel in the country's mining crown but closed due to low prices in the 1990s. It is being reactivated by Almonty Industries ( opens new tab with commissioning of the first 2,300-ton per year phase already in progress. A second phase of similar size could follow 12 months down the line. All of the first-phase production has been committed to Global Tungsten & Powders, the U.S. arm of Austria's Plansee Group, opens new tab. The contract comes with a minimum floor price of $235 per metric ton unit (mtu) basis the price of ammonium paratungstate and no upside cap. The current price is $342.50 per mtu. Floor prices are by no means uncommon in the mining industry but normally they come in the form of fancy financial hedging programmes paid for by the producer. But there is no futures market in tungsten, which makes this particular contract unique - or almost unique: Almonty has pulled off the same trick, opens new tab with its Sangdong Molybdenum project, locking in a hard floor price of $19 per lb with SeAH M&S, Korea's largest processor. The idea is to insulate the projects from the sort of destructive Chinese supply surge that is playing out in battery metals such as lithium, cobalt and nickel. Lacking any floor price protection, battery-metal start-ups have been crushed by low prices. AT ANY COST? Almonty may not have to worry too much about floor prices if China starts choking off the supply of tungsten products to the West. Although there is no outright ban yet, it is worth noting that germanium, gallium and antimony all got the special licensing treatment before Beijing put a total ban on exports of all three to the United States. As buyers scramble for non-Chinese material at any price, antimony has rocketed to $47,250 from $11,000 per kilogram at the start of 2024. Plansee Group's granting of what is in effect a free put option on Amonty's tungsten output bears testimony to how critical it thinks Sangdong's output will be to the non-Chinese tungsten market. The lesson for other critical mineral users is that relying on market prices alone to ensure supply will not guarantee you get the stuff you really need. The opinions expressed here are those of the author, a columnist for Reuters. here. Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.
