Highlights

  • Demand growth will ease as Northeast Asia enters spring
  • Production in China has slowed while India's output continues to decline
  • A mild start to spring in much of Northeast Asia will limit the need for additional LNG imports
  • Although prices have recovered, average spot prices for the region are around $7.50/MMBtu

Economic overview

China’s growth was relatively low in the first quarter of 2015, but is expected to be steady for the rest of the year.

China’s GDP grew by 7% in Q1 2015. Exports were up by 5% during the quarter, despite a 15% drop on an annual basis in March. The government is aiming to raise China’s GDP by around 7% in 2015, reflecting stable expansion, and is planning to expand the country’s gas sector. Although environmental policies should help increase the use of gas, progress will depend in part on China meeting its GDP targets.

GDP forecast – Asia Pacific

  2013 2014 2015 2016
Australia 2.4% 3.1% 2.5% 3.0%
Japan 1.5% 0.4% 0.8% 1.0%
Korea 3.0% 3.5% 3.8% 4.1%
New Zealand 2.5% 3.2% 3.0% 2.7%
Source:OECD

The OECD’s latest forecast for Japan predicts the country’s GDP will be up by 0.8% this year, with growth rising to 1% in 2016. The government has stated it is expecting steady growth. Japan’s gas demand rose at the start of 2015, and continued economic expansion will support the market during the rest of the year.