SunSirs: Energy, LNG Up 7.42% in March

According to the data monitoring of SunSirs, the average price of LNG on March 31 was 3,190 RMB/ ton, which was 3,053.33 RMB/ ton compared with the average price at the beginning of the month (March 1), up 7.42% in the month, down 11.91% compared with the same period last year. On April 2, the LNG commodity index was 80.60, down 0.25 points from yesterday, down 61.43% from 208.96 (2017-12-25), the highest point in the cycle, and up 17.07% from 68.85, the lowest point on October 7, 2019. (Note: cycle refers to 2012-09-01 to now)

Analysis of Influencing Factors

Products: as of April 2, the LNG price of Inner Mongolia Erdos Xingxing Energy Co., Ltd. was 3,300RMB/ton, and that of Inner Mongolia Etok QianqiShitai Natural Gas Co., Ltd. was 3,220RMB/ton. The LNG price of Zizhou LNG plant of Shaanxi Lvyuan Natural Gas Co., Ltd. was 3,300 RMB/ton, that of Xinjiang Guanghuinaomao Lake (east of Lanzhou) was 2,950 RMB/ton, that of Shanxi QinshuiXinao was 3,450 RMB/ton, and that of Shaanxi Zhongyuan lvneng Natural Gas Co., Ltd. was 3,290 RMB/ton, that of Dazhou Huixin Energy Co., Ltd. was 3,400 RMB/ ton, and that of Xinjiang Qinghua LNG was 3,700 RMB/ ton..

Market Analysis: domestic LNG rose continuously in March. In the first ten days, the delivery of liquid plants in the domestic LNG market had been gradually smooth. With the resumption of work of most downstream manufacturers, the demand had increased, providing support for the upward price of LNG. The price pushing psychology of liquid plants was obvious. The domestic LNG market continued to rise, and the upward trend starts to slow down in the middle of March. Since March 15, heating has been stopped in many places in the north, urban pipeline gas supply has been decreasing, and demand growth has slowed down, while LNG manufacturers' operating rate has increased, the situation of market supply exceeding demand is still the same, the rise of liquid price lacks practical support, and the price has started to fall back. At the same time, the price of LPG has declined significantly, and LNG users have begun to favor LPG with lower price. The price of imported gas has fallen continuously, seizing the domestic LNG market, and the price of domestic gas is subject to multiple constraints, which is vulnerable to fluctuations. In the late ten days, thanks to the national high-speed free policy, the demand for LNG trucks in the northwest increased, the market trading atmosphere improved, the liquid price in some areas rose by taking advantage of the trend, and the rising mentality in areas with low price in the early stage was strong, but the rising trend was relatively moderate. Towards the end of the month, the market gradually recovered steadily, with little fluctuation, the downstream enterprises basically resumed production, the demand increased, and the liquid price in some areas was small. Most of the prices are consolidation oriented, with caution. As a whole, LNG market in March showed an upward trend of shock, and there is a risk of falling in the future.

Industry: according to the price monitoring of SunSirs, in March 2020, there was a total of one kind of commodities rising month on month in the energy sector in the list of commodity price rise and fall, with LNG (7.42%) rising. There were 15 commodities falling on a month on month basis, with 13 commodities falling by more than 5%, accounting for 81.3% of the number of commodities monitored in the sector; the top three products falling were WTI crude oil (-57.34%), Brent crude oil (-48.93%) and LPG (-26.85%), with an average increase or decrease of -19.01% this month.

Market Forecast

According to the LNG analyst of SunSirs, in April, heating in the northern region began to end. As the heating demand in the downstream of LNG decreased gradually, the LNG market in China gradually entered the off-season. In addition, at present, the imported gas continuously gives way to the domestic LNG market, resulting in a large shipment pressure and high inventory of liquid plants. It is expected that LNG will still have a downward forecast in the short term.

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