Stronger LNG imports and lower power sector demand than last year helped South Korea make a net stockbuild in April. LNG imports were up y/y by 0.16 Mt at 2.34 Mt last month, leading to a net stock-build of 0.21 Mt and taking implied LNG stocks to roughly 2.16 Mt. While imports where higher compared to April 2016, the y/y increase has shrunk considerably over the last two months compared to the 2016-17 winter, when it was as high as 0.83 Mt in January.
Even as delivered LNG prices to South Korea in April fell m/m, they remained just above those to the UK, Spain and Mexico, helping South Korea attract some uncommitted Qatari supply. Qatari exports to the country were up by 0.07 Mt y/y at 0.66 Mt in April, although the increase comes from a low base as the April 2016 receipts total is the lowest for any month in the past three years. Australian deliveries were stronger y/y by 0.24 Mt—helping partially offset lower Malaysian and Indonesian supply—but at 0.49 Mt, they hit their lowest since August and likely hampered last month by outages at liquefaction facilities. Gorgon Train 2 went offline in late March for maintenance and did not return until mid-April, while the NWS LNG facility went offline for several days in April.
Cold weather in South Korea supported residual heating demand last month, although lower power sector gas demand offset some of those gains. HDDs were up by 11% y/y, but they were down by 16% against the five-year April average. Aggregate gas demand was 2.13 Mt, up by just (2%) y/y. LDZ demand grew by 0.09 Mt y/y at 1.31 Mt, but power sector demand fell by 6% to 0.82 Mt. The lower gas demand from power does suggest that there is still little evidence of fuel switching, though the cold start to the spring has offered some support.
Gas burn in the power sector was strong in March (the latest month for which data are available), rising by 31% (2.04 TWh) y/y to 10.22 TWh. The hefty rise in CCGT output was due to a 2.26 TWh y/y rise in aggregate power demand, to 46.7 TWh, coinciding with another month when nuclear generation was lower y/y. Nuclear output was down 1.43 TWh (10%) y/y at 13.18 TWh, although it was the highest monthly output since August 2016. In April, 21% of the country’s nuclear capacity was offline, compared to 5% the same time last year, although the situation changes in May when outages are flat y/y.