ANKARA

The coronavirus outbreak in China could put the global natural gas market under stress, the international rating agency Fitch Ratings said on Tuesday. 

The outbreak could put the gas markets in Europe and Asia under "severe stress" as China imports less liquefied natural gas (LNG), the agency said in a statement.

LNG imports to China, the world's third largest gas consumer after the U.S. and Russia, has been the key driver for the global natural gas market in recent years.

While China accounted for 17% of gas purchases in the world in 2018, it also accounted for 50% of global gas demand growth between 2016 and 2018, according to Fitch.

"Some Chinese importers of LNG have declared 'force majeure' on their contracts, which may cancel up to 70% of seaborne imports in February," the agency said.

"The magnitude of any demand loss will depend on the speed of business activity recovery," it added.

On the supply side, the gas market has already a supply glut due to new LNG capacity additions in Australia, Russia and the U.S.

"This was exacerbated by warm weather in Europe and Asia and the high level of gas storage in Europe," the statement said.

"Average spot prices almost halved as a result in 2019 compared to 2018," it added.