LAUNCESTON, Australia, Dec 20 (Reuters) – China strode like a colossus over major commodity markets in 2017, as the world’s biggest buyer of natural resources made its presence felt on demand for coal, iron ore, crude oil and liquefied natural gas (LNG).
China’s influence on major commodities is likely to remain the single most important factor driving supply and demand in 2018, but that’s not to say next year will simply be a repeat of what happened this year.
Still, some trends established in 2017 will continue, or even accelerate, with LNG potentially the best example. LNG imports surged 48 percent in the first 10 months of the year, as Beijing encouraged a switch from coal to the cleaner-burning fuel. Add in pipeline imports from central Asia, and China’s total natural gas imports were up 26.5 percent in the first 11 months of 2017.
Despite the surge in natural gas imports, and a 9.1 percent gain in domestic output in the first 11 months, it became clear that China still doesn’t have enough of the fuel available to meet its plans to largely phase out coal boilers being used in industries and for residential heating.
If history is a guide, however, it’s likely that by next winter China will have improved its natural gas infrastructure and will be able to consume more of the fuel.