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SunSirs: Energy, LNG Fell to New Low in May

May 22 2020 10:33:48     SunSirs (Selena)

According to data monitoring of SunSirs, the average price of LNG on May 21 was 2,680 RMB/ ton, down 8.57% from the beginning of the month and 24.51% from the same period last year. On May 21, the LNG commodity index was 65.73, down 0.33 points from yesterday, a record low in the cycle, down 68.54% from 208.96, the highest on December 25, 2017. (Note: cycle refers to 2012-09-01 to now)

In May, the domestic LNG price fell continuously, only rose briefly at the beginning of the month, and then began to fall continuously. Now it has fallen out of the historical low, with an average price of 2,680 yuan / ton. According to the data monitoring of SunSirs, as of May 21, the LNG price of Inner Mongolia Erdos Xingxing Energy Co., Ltd. was 2,620RMB/ ton, and that of Inner Mongolia Etok Qianqi Shitai Natural Gas Co., Ltd. was 2,650RMB/ ton. The LNG price of Xinjiang Guanghui Naomao Lake (east of Lanzhou) was 2,250 RMB/ ton, that of Shaanxi Zhongyuan lvneng Natural Gas Co., Ltd. was 2730 RMB/ ton, that of Dazhou Huixin Energy Co., Ltd. was 2,870 RMB/ ton, and that of Xinjiang Qinghua LNG was 3,000 RMB/ ton. LPG prices in all regions have declined to varying degrees.

At present, the domestic LNG market is in the off-season, and the downstream demand is difficult to improve. Since the recovery of toll collection from the highway, the transportation cost has increased, and some coal hauling vehicles have been shut down, resulting in a decrease in the demand for vehicles in the gas filling station, and the demand for existing vehicles has steadily increased, but it still fails to meet the expectation, resulting in a high inventory of the liquid plant and a pressure drop in the price. At the same time, Huanggang, Hubei Province started operation, the terminal has a relatively dense shipping schedule in the near future, the supply of goods in the yard has further increased, and the LNG supply in the market is relatively loose, but the supply-demand relationship is difficult to reverse in the short term, and the market is still weak.

On May 20th, PetroChina West feed gas no longer continued the fixed price of 1.57 RMB/ m3, and was adjusted to implement the step price mode according to the unit load. The benchmark price is 1.48 RMB/ m3, the intake load is more than 80%, and the gas price is 1.332 RMB/ m3. The more gas is used, the cheaper the feed gas price will be. This advantage increases the adjustable space for LNG price, temporarily alleviates the cost inversion situation of some LNG plants, and there is a small rebound signal in some areas, but domestic LNG is difficult to improve under the condition of insufficient demand follow-up. Moreover, with the convening of the two sessions in Beijing, production is limited and shut down in some areas, and industrial gas consumption is reduced again, which aggravates the contradiction between supply and demand in the market. The rebound of LNG in the future depends on the improvement of demand side.

Industry: according to the price monitoring of SunSirs, there are seven commodities in the list of commodity prices rising and falling on May 20, 2020, among which the top three commodities were thermal coal (2.97%), MTBE (2.86%) and LPG (1.18%). There WERE four kinds of commodities that declined on a month on month basis, and the top three products were asphalt (-1.14%), Brent crude oil (-0.46%) and petroleum coke (-0.44%). The average price of this day is 0.44%.

Market Forecast

According to the LNG analyst of SunSirs, at present, there are plenty of goods in the market, some LNG plants have maintenance plans, but the contradiction between supply and demand still exists. Sentiment was boosted by lower feed gas costs, but domestic LNG market is expected to remain weak in the short term due to demand.


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