Korea Gas December Sales Fall on Slower Power Demand

By Shinhye Kang

Jan. 8 (Bloomberg) -- Korea Gas Corp., the world’s biggest buyer of liquefied natural gas, said domestic gas sales dropped for a third month in December as slower economic growth sapped demand from power producers.

Sales declined 9.2 percent to 3 million metric tons last month, the Seongnam, South Korea-based company said in a regulatory filing today.

Demand from power producers dropped 25 percent to 951,308 tons as factories cut electricity consumption. The country’s industrial production fell by a record in November and exports dropped by the most in almost seven years, adding to concern that the economy is headed for its first recession in a decade.

“Demand from power producers was much worse than we had expected,” said Kim Sang Gil, an investor relations official at Korea Gas. “The trend will continue at least for a couple of months as slower economic growth reduces electricity use.”

Hyundai Motor Co., South Korea’s biggest automaker, temporarily halted operations at some production lines, while LG Display Co., the world’s second-largest maker of liquid-crystal displays, and Hynix Semiconductor Inc. have joined global rivals in cutting output to cope with cooling demand. Posco, Asia’s third-biggest steelmaker, will cut crude steel production for the first time in its 40-year history.

Consumption of gas by households and businesses increased 0.9 percent to 2 million tons in December, Korea Gas said.

To contact the reporter on this story: Shinhye Kang in Seoul at skang24@bloomberg.net.