Commodity chaos deepens as China LNG buyer invokes force majeure

A process equipment built by KNM Group Bhd's Changshu plant in China for CNOOC Ltd. - Filepic

SINGAPORE: The turmoil engulfing global commodity markets deepened as China’s biggest buyer of liquefied natural gas (LNG) told suppliers it won’t honour some contracts because of the coronavirus.

In a dramatic and rare step, China National Offshore Oil Corp (CNOOC) declared what’s known as force majeure, meaning it won’t take delivery of some LNG cargoes, because the virus is constraining its ability to import the fuel. It’s among the first known cases of the legal clause being invoked in commodity contracts as a result of the epidemic.