(Bloomberg) -- Industrial demand for natural gas in the factory-heavy province of Jiangsu slumped 43% in April from a year earlier, in another sign of how virus lockdowns are wreaking havoc on China’s economy.

Jiangsu is China’s second-biggest provincial economy and it lies just to the north of Shanghai, where the harshest Covid-19 restrictions resulted in a web of quarantine rules disrupting transport and labor. The figures are from the National Energy Administration.

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Across the entire country, gas demand fell by around 6% last month from a year earlier to the lowest since September 2021, while industrial consumption was down 8.4%, Morgan Stanley said in a note that cited data from BSC Energy Consulting. The figures compared with a 2.1% year-on-year decline in overall demand in March.

China -- the world’s biggest liquefied natural gas importer last year -- has stuck to its Covid Zero approach to quell outbreaks, weighing on energy consumption. Prices of the super-chilled fuel -- used for industry, heating and electricity generation -- are also at elevated levels due to rising demand and less supplies from Russia following its invasion of Ukraine.

“The weak industrial demand in March and April was caused by a combination of high gas cost and Covid-containment measures,” Morgan Stanley analysts including Simon Lee said in the note dated May 9. 

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China’s biggest gas importers have curbed purchases in the past year due to high spot prices, mild winter weather and lackluster demand. The country’s LNG imports are down nearly 20% in the first four months of the year from the same period in 2021, ship-tracking data compiled by Bloomberg show.

 

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