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SunSirs: Energy, Gas Market Downturned, LNG Dominated the Gas Market in March
April 10 2020 09:51:10SunSirs(Selena)

In March, the gas market was affected by the irrational decline of international crude oil, with the overall price falling all the way, and the market never recovered. In March, the decline of LPG was 26.85%, that of liquefied propane was 26.7%, and that of DME was 14.87%. However, LNG was the only red spot in the collective decline of the gas market, with an overall increase of 7.42% in March.

In March, the downstream return to work rate increased significantly, the demand recovered and the price rebounded. On one hand, the opening of domestic transportation bottlenecks has cleared the obstacles for the LNG market, and the strength of LNG shipment has gradually increased. On the other hand, with most of the downstream manufacturers returning to work, the demand has increased, providing support for the price of LNG, the price pushing psychology of the manufacturers is obvious, the domestic LNG market continues to rise, and the rising trend starts to slow down in the middle of the year. In the middle and late March, urban pipeline gas replenishment continued to decrease, demand growth slowed down, LNG began to callback, prices fell, erasing some of the previous gains.

In the later stage, SunSirs believes that in April, as the heating demand in the downstream of natural gas gradually decreased, China's LNG market gradually entered the off-season. In addition, at present, the import gas has been making profits continuously, which has impacted the domestic LNG market. The pressure of liquid factory's delivery is large, and the inventory is on the high side. It is expected that LNG will still have a downward trend in the short term.

In March, the domestic LPG (Shandong) market was greatly affected by the crude oil slump, mainly following the decline. At the beginning of the month, the average price of the domestic LPG was 3,700 RMB/ ton, and at the end of the month, the average price was 2,706.67 RMB/ ton, with a drop of 26.85% in the price within the month, 32.28% lower than the same period last year. At the beginning of the month, although the CP price fell in March, it fell less than expected, which brought certain benefits to the market. Coupled with the rebound of international crude oil, downstream market access improved, manufacturers shipped smoothly, and prices rose slightly. But then crude oil plummeted, and the market was in a bad mood. The downstream markets withdrew. In the middle of the month, crude oil plummeted again, hitting the market obviously, manufacturers kept making profits, and the shipment situation slightly improved. Then, with the retaliatory rebound of crude oil and the growth of market demand, the LPG market ushered in the rising market again. However, the positive results were limited. At the end of the month, with the further exploration of crude oil and the impact of the sharp fall of CP price expectation in April, LPG turned back to decline again. At present, although the terminal demand has improved, it has not fully recovered, and the contradiction between market supply and demand is still in progress. However, at present, LPG has fallen to a relatively low level, and manufacturers have a clear attitude of market protection. The trend in April may be expected to rise.

As a pure product, liquefied propane continued to decline in March. At the beginning of the month, the average price of propane market was 3,717.5 RMB/ ton, and at the end of the month, the average price was 2,725 RMB/ ton, with a drop of 26.7% in the month. The price was 35.08% lower than that of the same period last year. The main reason for the decline is due to the impact of crude oil, and the expectation of CP in April keeps falling, which continuously depresses the mentality of the industry. The manufacturer's shipment situation is light, and the price is constantly lowered to make profits. But during this period, the downstream continued to wait and see, with a more cautious attitude. At present, affected by seasonal factors, with the gradual warming of the weather, the propane market demand is expected to decrease. But at present, the price has been at a low level, and there is little room to fall. The propane market is expected to rise to a certain extent in April.

DME is a kind of coal chemical raw material, flammable gas, which is a new type of energy converted from coal. Now it is mostly used for mixing LPG. In March, DME market continued to bottom out, during which it rebounded twice, but the momentum was insufficient, and the overall market still fell. At the beginning of the month, the average price of domestic DME market was 3,003.33 RMB/ ton, and at the end of the month, the average price was 2,556.67 RMB/ ton, with a drop of 14.87% in the month, 24.36% lower than the same period last year. In March, the operating rate of DME was about 10%, and the market trading atmosphere remained depressed, which was hard to change. The international crude oil fell sharply last month, which significantly depressed the LPG market. Although the demand for civil gas increased last month, the range was relatively limited, mainly following the broad decline of crude oil. However, there was no difference in the price of gas ether, and the demand for DME decreased. The market of cost methanol also continued to decline in March. Affected by COVID-19, the downstream demand of domestic methanol spot market recovered slowly, especially the traditional downstream market. After the middle of March, the impact of COVID-19, the continuous drop of foreign financial market triggered the fuse, the pressure of the surrounding environment, methanol fell widely, and mostly refreshing new lows in the year and some regional production enterprises have touched production lines or lost money. Affected by the weakness of civil gas and cost methanol, the market of dimethyl ether rebounded twice this month, and it was difficult to reverse the situation and continue the decline. It is expected that if the LPG market rises significantly in April, it will give a boost to the DME market.

 

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