Japan imported record amounts of liquefied natural gas (LNG) and thermal coal in the fiscal year that ended in March, trade data showed on Thursday, while early signs of improving business confidence suggest the trend could continue. Japanese exports picked up in March from a year earlier for the second time in the past three months, beating forecasts and offering hope that a weaker yen is starting to support a slow upturn in the export-reliant economy.
Japan, the world's biggest LNG buyer, bought 86.865 million tonnes of the fuel in the fiscal year to March 2013, up 4.4 percent from the previous high hit a year earlier, and racking up a record trade deficit for the world's No 3 economy. "We will probably see higher overall energy consumption this fiscal year," said Yu Nagatomi, an economist at the Institute of Energy Economics of Japan, pointing to recent signs of improving economic activity and an upward revision this week of Japan's growth by the International Monetary Fund.
City gas consumption tends to increase with higher corporate activity and power utilities will burn natural gas at newly-built power stations, strengthening chances for another record volume of LNG imports in 2013/14, Nagatomi said. Power utilities burned more gas and other fossil fuels after the Fukushima disaster in March 2011, with nearly all the country's nuclear reactors offline, and regulatory approval for more units to go online expected to come later this year, at the earliest.
Japan's customs-cleared imports of thermal coal for power generation in the past fiscal year were 106.289 million tonnes, for an annual increase of 4.5 percent and exceeding the previous record of 105.012 million set in the year to March 2011. Crude oil imports were 211.021 million kilolitres (3.64 million barrels per day), up 0.6 percent from fiscal 2011/12, the Ministry of Finance (MOF) data showed.
Oil demand in Japan, the world's third-biggest oil consumer, has been gradually falling as the fuel efficiency of cars and factories improves and energy sources diversify from costly oil to cleaner fuels, although power utilities have had to step up oil use when demand peaks in summer and winter. Japan's crude cocktail (JCC) price rose to a record in the year to March 2013, underlining high cost burdens on energy companies. The price, or the average rate for customs-cleared crude imports, is used as the benchmark for LNG prices for Japanese buyers. Power utilities are Japan's top LNG buyers.
The MOF calculated the JCC price for 2012/13 at $114.27 per barrel, up from the previous record of $114.10 a year earlier. Its price was $115.60 in March. In March, the country's customs-cleared oil imports fell 3.2 percent to 18.235 million kilolitres (3.70 million barrels per day) from a year earlier, marking the sixth straight month of decline. That compared with February imports of 18.689 million kl. The MOF will release detailed data, including country breakdowns, later this month.
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