Highlights

  • Colder weather spikes regional consumption in China
  • Japan's nuclear restarts will hit gas demand
  • LNG imports into Northeast Asia continue to fall year on year
  • Spot LNG prices see lows at the peak of winter

Economic overview

China’s economy will see reduced growth this year, while economic expansion in Japan could increase.

China’s GDP is expected to grow by 6.3% this year and 6% in 2017, according to the latest outlook from the International Monetary Fund (IMF). China’s economy is rebalancing and moving away from manufacturing and investment to services and consumption. The poor performance is being driven partly by reduced investment and manufacturing. However, despite the slow economic growth, there is potential for China’s gas market to expand more this year than it did in 2015.

GDP forecast

  2014 2015 2016 2017
Japan 0.0% 0.6% 1.0% 0.3%
China 7.3% 6.9% 6.3% 6.0%
India* 7.3% 7.3% 7.5% 7.5%
ASEAN 5** 4.6% 4.7% 4.8% 5.1%
*For India, data and forecasts are presented on a fiscal year basis and GDP from 2011 onward is based on GDP at market prices with FY2011/12 as a base year.
**Indonesia, Malaysia, Philippines, Thailand, Vietnam. Source: IMF WEO January 2016

Japan’s economic growth is expected to improve this year, but the rate of expansion will not be maintained. Japan’s GDP is expected to rise by 1% in 2016, according to the IMF, up from 0.6% last year. But growth of just 0.3% is expected in 2017. The country is benefiting from the fall in oil prices - which at $33/bbl, are down by around 44% year on year. However, with the restart of more nuclear reactors this month and more expected later this year, any potential gas market gains that might have been supported by Japan’s GDP growth will be outweighed by a reduction in gas demand from the power sector.