The Japanese government’s response to the coronavirus outbreak could bring the price of liquefied natural gas (LNG) down further, Bloomberg reported on March 2.
Asian LNG markets were already looking weak in late 2019, as mild winter weather kept gas demand low, and they grew weaker still in early 2020, as the rapid spread of the virus led to a slowdown in economic activity in China. They may now lose additional momentum as a result of events in Japan, the world’s largest importer of LNG.
On February 27, Japanese Prime Minister Shinzo Abe urged all of the country’s elementary, middle and high schools to close their doors for at least a month to reduce the risk of infection. If this move leads to a decline in demand for electricity, it will also undercut imports of LNG, which Japan uses primarily for power generation, Bloomberg said.
Hiroshi Hashimoto, an analyst for the Institute of Energy Economics (IEE) in Tokyo, stressed that it was too early to determine exactly how school closures might affect the country’s consumption of gas. “Electricity demand is expected to decrease by a few percentage points due to school closures and slowed corporate activities, which may be offset to some extent by increasing residential energy use as people are expected to stay home longer than usual,” he told the news agency.