*China’s annual gas consumption is on track to fall for the first time in decades for 2022. For 1H 2022 consumption of 183.5bcm was down 2.4% year-on-year amid lackluster economic growth, in part due to repeated Covid lockdowns combined with switching where possible from pricey gas to cheaper coal. China’s GDP grew by a mere 0.4% year-on-year for Q2, the lowest figure in decades aside from the Covid nadir of Q1 2020. The IMF this week cut its forecast for China’s GDP growth to just 3.3% for 2022.
*The IEA, in its latest global gas market report released earlier this month, nevertheless forecasts that China will still record 3% year on year demand growth for 2022. This looks optimistic. Whilst the IEA points to one-offs depressing demand in Q1 – namely “mild winter temperatures and factory closures to improve air quality ahead of the Beijing Winter Olympics in February,” year-on-year falls have continued since. The key assumption underlying the IEA’s expectation of a 2H demand rebound, “that Covid-related restrictions on economic activity are gradually lifted by mid-2022,” already looks overly optimistic. (CONTINUED - 618 WORDS)