In December 2020, Asia's LNG demand increased by 14% year-on-year, reaching an all-time high of 26 million tons. Regionally, most of the increase in demand is coming from China and Japan, while the demand of other major Asian LNG importing countries remains stable.

Spot prices for Asian liquefied natural gas (LNG) have risen rapidly in the past month. The average spot price of benchmark liquefied natural gas (JKM) in Japan and South Korea in December 2020 was almost double the average price in November and five times the average price in summer 2020. This price and the increase is much higher than the European and the North American market.

The strong growth in Asian LNG demand is mainly driven by the following factors:

First, because of the unusually cold winter. This winter, average daily temperatures across Asia have been well below the average for the past five years. For example, Japan's December 2020 indoor temperature days below 18℃ were 18% higher than the five-year average, and China's December 2020 were 19% higher than the five-year average. Temperatures in Seoul, South Korea, fell to minus 18.6℃ in early January, the lowest in the city in 35 years. The cold wave continued to plague countries in Northeast Asia in January. 

Second, the Covid-19 outbreak increased ventilation in a large number of public places, further driving up demand for heating and electricity across North Asia. In response to this pandemic, for example, many public venues in Japan kept their windows open 24 hours a day, which partly explains the 13% year-on-year increase in Japan's LNG demand in December 2020.

Finally, it is because the recovery speed of China's industrial production is not only significantly higher than that of other countries in the world, but also higher than most market analysts' expectations. China's LNG imports in December 2020 were up 34% year-on-year.

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