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LNG market will recover rapidly in 2021LNG traders expect novel coronavirus pneumonia demand to recover rapidly in 2021 after the 2019 new crown pneumonia outbreak has led to price volatility.
Due to cold weather in major importing countries, blackouts in major production centers and congestion on global routes, Asian spot prices have reached their highest level since 2014, more than six times the record low in April, making Asian LNG the best performing major commodity in 2020.
As countries are looking for cheaper, more reliable and cleaner alternatives to coal, demand for this fuel for heating and power generation is growing faster than any other fossil fuel. The epidemic has derailed growth in 2020, and China and India are becoming major sources of demand.
The following are the main factors that may affect the LNG market in 2021.
First, the recovery of demand is unbalanced. According to the ship tracking data compiled by Bloomberg, the global LNG import volume in 2020 is roughly the same as that of the previous year. This is a huge impact on an industry with an annual growth rate of 10% since 2016. However, global gas demand is expected to resume growth in 2021. Manas satapaty, managing director of Accenture’s energy business, said LNG demand accounted for about 10 per cent of total demand and that demand could rebound more quickly based on the performance of Pakistan, India and Bangladesh.
Second, the supply side. Unscheduled maintenance of LNG Export facilities from Australia to Qatar to Malaysia has led to a tighter than expected market in the second half of this year. Delays in the navigation of the Panama Canal have limited supplies to Asia. If these supply disruptions continue into 2021, prices are likely to remain well above current levels.
Third, energy transformation and upgrading. Environmentalists increasingly regard natural gas as the main source of pollution. After years of focusing on coal and oil, they are turning their attention to eliminating all fossil fuel emissions. This shift has prompted suppliers, buyers and transporters to consider green action to clean up activities related to methane and greenhouse gas emissions.
This year, the world’s first supply agreement requiring a carbon emission statement has been signed. At the same time, so-called carbon neutral goods have begun to enter China and Japan, and countries have set the grand goal of effectively achieving zero emissions