India's Lockdown to Hit LNG: WoodMac
India's LNG demand is likely to drop as the country has extended the lockdown till May 3, Wood Mackenzie Asia Pacific vice-chair, Gavin Thompson said in a note April 14.
“India’s gas demand has been severely affected, primarily across the transport and industrial sectors. As a notoriously price-sensitive market, low oil prices are also a competitive threat to gas. High inventories are resulting in refiners further reducing margins for oil products to compete with gas, leading to downside risk on the LNG demand outlook,” Thompson said.
On the evening of March 24, India's prime minister Narendra Modi imposed a three-week nationwide lockdown in an attempt to slow the spread of Covid-19. The lockdown came into effect on March 25 and was to last till April 14. However, with the number of Covid-19 cases on the rise, the government has now extended the lockdown.
The forecast of a decline in Indian LNG demand is bad news for the already oversupplied LNG market. India, the fourth-largest LNG importer in the world, had been a bright spot as it soaked up large volumes of the commodity. The country’s LNG imports had spiked in the last couple of months as prices have been trading at multi-year lows.
In January, India’s imports grew by 25% yr/yr and in February they spiked by a whopping 68% yr/yr. The cumulative imports of 30.81bn m3 (about 23mn mt) during the 11 months of the current financial year that ended on March 31 (2019-2020), were higher by 16.9% compared with the corresponding period of the previous year, the government data showed.