* North Asia's temperatures are expected to fall by
* LNG and coal imports to rise in Japan, China and South
* High power consumption to result in lingering China smog
By Henning Gloystein and Mark Tay
SINGAPORE, Jan 6 Winter temperatures in North
Asia will swing to unusually cold from relatively mild in the
coming weeks, lifting the demand for liquefied natural gas (LNG)
and thermal coal as regional power stations ramp up to meet the
increased heating needs.
January tends to be the coldest month of the year in the
northern hemisphere, and a drop to colder-than-usual
temperatures during the peak winter heating demand season is
likely to tighten markets and support already high prices for
coal and LNG.
Analyst forecasts and utility order books show rising LNG
and coal purchases to meet the electric heating demand in North
Asia's biggest energy consumers of China, Japan and South Korea
and their economic hubs.
"If the coming 45 days are colder than normal in other
years, there will definitely be an uptick in energy demand. Many
people in Japan and South Korea use city gas for heating in
their homes," said Boseok Jin, an energy analyst with IHS Markit
based in Tokyo.
Temperatures in Tokyo, Seoul and Beijing, with a combined
population of roughly 60 million people, may drop to 2 degrees
to 3 degrees Celsius below normal for mid-January, from current
levels of 3 degrees to 5 degrees above normal, Thomson Reuters
Eikon data shows. The unusually cold weather should persist over
the next 45 days in Seoul and Beijing.
The temperature swing should raise power and fuel
consumption and tighten North Asia coal and LNG markets, two
utility traders said.
Eikon data shows that LNG consumption in Japan, the world's
biggest importer of the fuel, will hit its highest in over a
year this month, at 10.73 billion cubic metres (bcm), up from
9.7 bcm in December.
In China, the world's second-biggest LNG consumer, imports
have set new records since last November and rose to at least
7.33 bcm in December, a trend that should persist.
Demand in South Korea, another top LNG consumer, is expected
to rise from 5.03 bcm in December to 5.23 bcm in January, the
highest level since January 2015, Eikon data shows.
SMOG TO LINGER
The cold weather should keep coal use elevated, especially
in China, where it is the primary fuel for electricity
A trader with a major commodity shipper said that order
books for coal supplies to Asia were full for January, although
he added that "by the time of the Chinese New Year in late
January, we'll likely see a fall off in demand due to warmer
weather and falling holiday consumption."
The Chinese New Year, also known as the Lunar New Year, is
celebrated across Asia and will start on Jan. 28 this year,
reducing industrial and commercial energy consumption.
Before that, the unseasonably cold weather will increase
power and fuel usage and likely boost prices.
Thermal coal shipments to China stood between 12.7 million
and 13.8 million tonnes in November and December, the highest
level since at least January 2015, Eikon data shows. The utility
traders said a similarly high figure was likely for January.
The high use of coal will contribute to ongoing smog North
China, including Beijing, where people have been suffering from
hazardous air for weeks.
Asian spot LNG prices LNG-AS were at $9.50 per million
British thermal units on Dec. 30, their highest level since
Asian benchmark Australian coal cargo prices
are at $83 per tonne they remain over two-thirds higher than
this time last year.
(Reporting by Henning Gloystein and Mark Tay; Editing by