China has ramped up coal production to offset declines in imports of coal and LNG amid surging global energy prices, and analysts expect natural gas consumption to contract further in 2022 while coal consumption continues to rise.

The trend is in line with natural gas demand destruction in several industries that have a high share of gas usage, such as ceramics that requires high-temperature gas furnaces, and a wider switch toward cheaper fuels, like coal and oil, in the region to keep the lights on.

China's total natural gas supply, comprising domestic production and imports of pipeline gas and LNG, fell 6.6% year on year to 28.85 billion cubic meters in April, according to official data.

Out of this total supply, imports showed a much sharper decline. China's natural gas imports, including piped gas and LNG, peaked in December 2021 at 16.07 Bcm, and dropped 30% to 11.15 Bcm in April, according to customs data.

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