SunSirs: Energy, Domestic LNG Plummeted nearly 10% in the First Half of December

1. Price Trend

The northwest raw gas auction on December 13 did not bring a new turning point to the LNG market, and the decline continued. According to the data monitoring of SunSirs, the average price of LNG on December 1 was 4.650 RMB/ton, and the average price on December 14 was 4.230 RMB/ton, down 9.03% in half a month, up 24.01% compared with the same period last year.

1. Analysis of Influencing Factors

Products: according to the data monitoring of SunSirs, as of December 14, the LNG price of Inner Mongolia Erdos Xingxing Energy Co., Ltd. was 4,270 RMB/ton, and that of Inner Mongolia Etok Qianqi Shitai Natural Gas Co., Ltd. was 4,120 RMB/ton. The LNG price of Xinjiang Qinghua Energy Group Co., Ltd. was 4,300 RMB/ton, that of Zizhou LNG plant of Shaanxi Lvyuan Natural Gas Co., Ltd. was 4,500 RMB/ton, that of Xinjiang Guanghui naomao Lake (east of Lanzhou) was 3,270 RMB/ton, that of Shanxi Qinshui Xinao was 4,300 RMB/ton, and that of Shaanxi Zhongyuan lvneng Natural Gas Co., Ltd. was 4,300 RMB/ton. The LNG price of Dazhou Huixin Energy Co., Ltd. was 3,950 RMB/ ton, and the price of LNG rose and fell in regions, and fell as a whole.

Market analysis: in the morning of December 13, CNPC west LNG sales company launched an online auction of resources in Inner Mongolia and Ningxia around Changqing Oilfield in the second half of December in Chongqing oil and gas trading center. The raw gas auction in Jingbian area of Shaanxi Province was not included in the auction. The final auction volume was 97 million m3, starting price was 1.57 RMB/m3, ceiling price was 2.51 RMB/m3, all of which were sold. However, the auction did not boost the market, and the decline was still hard to stop, reaching 9.03% as of December 14. Recently, there are rain, snow and heavy fog in many places in the north, LNG shipment is blocked, tank transportation is not smooth, inventory of some LNG plants is high, shipment of terminals in some areas is reduced, and LNG prices are falling. Due to the introduction of air pollution emergency response in many places, the gas consumption of LNG industry in some regions has been affected, and there is no large-scale replenishment demand in the downstream for the time being, and pipeline gas is relatively abundant. There is still a certain pressure on the sales of LNG plants, the LNG liquid level is high, and the price is under pressure. In terms of gas intake, the price is relatively stable and the supply is sufficient, which has a certain impact on domestic LNG. With the haze dispersed and the road gradually recovered, the delivery of LNG plants has improved to a certain extent, some manufacturers have increased price tentatively, LNG price is up and down. As a whole, LNG price has been declining all the way for half a month, and is hard to stop.

News: According to data released by the General Administration of Customs, on December 8, China imported 9.455 million tons of LNG in November 2019, an increase of 2.931 million tons, an increase of 44.9%; an increase of 301,000 tons, an increase of 3.3%. LNG imports in November were US $4.03 billion, an increase of US $1.27 billion, an increase of 46.0%; a year-on-year decrease of US $330 million, a decrease of 7.6%. According to this calculation, the average price of LNG imports in China in November was US $425.7 /ton, an increase of US $2.5 /ton from the previous month, an increase of 0.6%; and a year-on-year decrease of US$ 50.3 /ton, a decrease of 10.6%. From January to November, China imported 87.113 million tons of LNG, a year-on-year increase of 7.4%. Cumulative imports were $37.84 billion, a year-on-year increase of 11.8%. According to this calculation, the average price of LNG imports in China from January to November was $434.4 /ton.

Industry: According to the price monitoring of SunSirs, in the 49th week of 2019 (12.9-12.13), there were four kinds of commodities rising month on month in the energy sector, the top 3 commodities were petroleum coke (1.49%), fuel oil (0.66%) and LPG (0.59%). There are ten kinds of commodities falling on a month on month basis, and the top 3 products were MTBE (- 3.90%), LNG (- 3.03%) and methanol (- 1.51%). Last week's average was up or down - 0.52%.

1. Market Forecast

According to the LNG analyst of SunSirs, at present, severe pollution weather problems still exist, many air pollution emergency response continues, terminal demand cannot be significantly improved, pressure reduction of LNG plants inevitably leads to cost inversion; The bidding on December 13 has a limited role in boosting the market, and the LNG price is still declining. It is expected that LNG will be difficult to rise in the short term, and LNG trend will still be weak without obvious positive support.

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