China's LNG apparent consumption is expected to have jumped 31.37% year-on-year to 19.57 million tonnes in the first half of 2024, driven up by the robust sales of LNG-fuelled heavy-duty trucks in view of attractive LNG prices, according to OilChem.
Source: OilChem
In the first five months, China's sales of heavy-duty LNG trucks surged 127% year-on-year to 92,500 units, primarily driven by lower LNG prices. Especially, the sales exceeded 20,000 units for three consecutive months over March-May, when the LNG prices showed a downtrend.
Meanwhile, due to the significant increases in the ownership of heavy-duty LNG trucks, the demand for vehicle LNG continued to strengthen, which will further drive up the domestic LNG apparent consumption in the second half.
Source: OilChem
Note: 1) The LNG prices are based on mainstream retail prices within the region, while the gasoil prices are the retail ceiling prices set by the government.
2) Driving the same distance requires the same amount of heat, taking a calorific value of 11,000 kcal/kg on LNG and 9,181 kcal/L on gasoil. The LNG has economic benefits when the theoretical price of LNG is not higher than 1.2 times the price of gasoil.
3) Considering that the cost of purchasing and maintaining heavy-duty LNG trucks is higher than that of heavy-duty gasoil trucks in actual operation, the LNG has economic benefits when the price of LNG is not higher than the price of gasoil.
Separately, the sales of heavy-duty LNG trucks were mainly clustered in the resource-rich provinces such as Hebei and Shanxi where logistics and transportation serivces were also active, with the sales volumes of 16,400 units and 15,500 units respectively, accounting for 17.70% and 16.70% of the total, followed by Shandong, Henan, Ningxia and Sichuan, taking up 9.40%, 8.70%, 7.20% and 6.00% respectively.
Looking ahead, bolstered by the strong demand from the transport sector, the LNG apparent consumption is expected to grow in the second half, despite rising LNG prices in view of higher international spot LNG prices.
Therefore, OilChem expects that the LNG apparent consumption will reach 21.69 million tonnes in the second half, up 10.81% compared to that in the first half. This will bring the domestic total consumption to 41.26 million tonnes in 2024, soaring 24.19% year-on-year.
Written by Sunny Fang, fss@oilchem.net
Edited by Aggie Hu, huchenying@mysteel.com