SunSirs: Energy, How Long Can LNG Continue to Rise?

Price Trend

According to data monitoring of SunSirs, the average price of LNG on March 12 was 3,180 RB/ ton, 3.58% higher than last Thursday (March 5), and 21.03% lower than the same period last year. On March 12, the LNG commodity index was 78.38, up 0.9 points from the previous day, down 62.49% from 208.96 (2017-12-25), the highest point in the cycle, and up 13.84% from 68.85, the lowest point on October 7, 2019. (Note: cycle refers to 2012-09-01 to now)

Analysis of Influencing Factors

Products: according to the data monitoring of SunSirs, as of March 12, the LNG price of Inner Mongolia Erdos Xingxing Energy Co., Ltd. was 3,230RMB/ton, and that of Inner Mongolia Etok QianqiShitai Natural Gas Co., Ltd. was 3,150RMB/ton. The LNG price of Zizhou LNG plant of Shaanxi Lvyuan Natural Gas Co., Ltd. was 3,200 RMB/ton, that of Xinjiang Guanghuinaomao Lake (east of Lanzhou) was 2,700 RMB/ton, that of Shanxi QinshuiXinao was 3,350 RMB/ton, and that of Shaanxi Zhongyuan lvneng Natural Gas Co., Ltd. was 3,160 RMB/ton, that of Dazhou Huixin Energy Co., Ltd. was 3,500 RMB/ ton.

Market analysis: in March, the shipment of liquid plants in the domestic LNG market is gradually smooth, the liquid level is generally not high, and the price pushing of LNG plants is obvious. The price in the northern region is tentatively rising, while the price in the southern region is lower. In addition, the shipment of imported LNG makes profits, which impacts the domestic gas market, and some regions are under pressure to reduce the price for the shipment. As a whole, the LNG market is in a mixed situation. With most of the downstream manufacturers back to work, the demand has increased, providing support for the upward price of LNG, the price pushing of LNG plants is obvious, the domestic LNG market is stable and rising, and the prices in some areas are adjusted according to their own liquid level and the surrounding environment, with small fluctuations. In Shaanxi and Inner Mongolia, the price of LNG plants has increased, but not much. Due to the increase of gas consumption of gas stations in Sichuan, the surrounding liquid prices have been driven up by demand. In recent days, the international oil price has fallen sharply, and the price of imported LNG has fallen. For the time being, it has little impact on domestic LNG. With the end of heating period in most cities on the 15th, the demand for external mining of urban gas has disappeared, and LNG may usher in a turning point.

News: according to the latest data of the General Administration of customs, from January to February 2020, China imported 17.82 million tons of natural gas, a year-on-year increase of 487,000 tons, or 2.8%. From January to February, the cumulative import of natural gas was $7.08 billion, a year-on-year decrease of $1.34 billion or 16.0%. According to this calculation, the average price of China's natural gas import from January to February is $397.5/ ton, a year-on-year decrease of $88.9/ ton, a decrease of 18.3%; a decrease of $11.2/ ton, a decrease of 2.7% compared with December 2019. In 2019, China imported 96.562 million tons of natural gas, a year-on-year increase of 6.9%; the cumulative import value wa $41.720 billion, a year-on-year increase of 8.5%. According to this calculation, the average price of China's natural gas import in 2019 is $432.1/ ton.

Industry: according to the price monitoring of SunSirs, there were three kinds of commodities in the list of rise and fall of bulk commodity prices on March 12, 2020. The top 3 commodities were LNG (1.17%), diesel (0.31%) and gasoline (0.17%). There were 5 kinds of commodities that had declined on a month on month basis, with WTI crude oil (-4.02%), Brent crude oil (-3.84%) and DME (-1.64%) as the top 3 products. The average price of this day was -0.59%.

Market Forecast

According to LNG analyst of SunSirs, at present, the domestic gas consumption has increased, the LNG market has improved, and the price has been rising continuously. With the end of the heating season in the north, the demand for external mining of urban gas has disappeared, and the market will be in a situation of supply exceeding demand. It is expected that the price will occasionally rise in the short term, but it is difficult to sustain the weakness of the future market, and the overall trend is still downward.

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