LNG: China’s Easing of Fertilizer Exports to India Neutral For LNG
Aug-21 12:35
The easing of China’s restrictions on fertilizer exports to India is near-term natural for spot LNG prices, Platts said.
- This is as the incremental supply will come in the middle of a severe shortage at the start of the planting season and not compete with existing local output.
- Longer term, cheaper fertilizer imports from China could become competitive with India’s domestic fertilizer production and present a downside risk to India’s LNG imports.
- Unlike LNG demand in North Asia, which is largely driven by electricity consumption, the fertilizer sector is the largest consumer of India’s LNG imports and accounts for nearly 50% of downstream LNG use.
- Any immediate ramp-up in Chinese fertilizer supply will not have any short-term impact on India’s LNG feedstock consumption.
- In the longer term, it remains to be seen whether competing Chinese supply will impact India’s plans to expand urea production capacity and associated LNG imports.
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