SunSirs: China LNG Goes Up in June, but the Expectation Fails

In June, China domestic LNG market showed a steady rising rhythm in the first ten days, and began to decline after the middle ten days, with little price change this month. According to data monitoring of SunSirs, the average price of LNG on June 24 was 2,473.33 RMB/ ton, up 0.13% compared with the beginning of the month, and down 26.32% compared with the same period last year.

In June, the decline of domestic LNG slowed down and rebounded slightly. Since June 15, the pipeline maintenance of the fifth processing plant of CNPC has also affected the production of some LNG plants. Moreover, due to the low price of domestic LNG, some enterprises have entered the maintenance stage ahead of time due to cost considerations, As a result, in June, most of the maintenance enterprises reduced their production and boosted the market. After continuous price reduction and sales, the inventory pressure was eased, and the delivery situation was improved. The LNG factory took advantage of the situation to push up tentatively. On the whole, the overhaul tide of the LNG plant injected vitality into the sluggish domestic LNG market, and the LNG price stopped falling and rebounded. According to the data monitoring of SunSirs, the average price of LNG on June 11 was 2,503.33 RMB/ ton, 1.35% higher than 2,470 RMB/ ton at the beginning of June. Restricted by the consumption season, the increase was not significant.

China domestic LNG overall declines due to the negative factors

The benefits brought by the overhaul are limited; the demand is reduced in the off-season. Imported gas has greatly promoted sales, the shipping schedule is tight, domestic LNG factories have no results in supporting the market, and the upward path of LNG is fleeting. After a short period of stability in the middle June, it continued to decline. Recently, the environmental protection problem is severe, and the shipment of domestic LNG factories has been suppressed to some extent, and the price is under pressure.

According to data from SunSirs, as of June 24, the domestic average price of LNG was 2,480 RMB/ ton, the price in Inner Mongolia was around 2,460-2,500 RMB/ ton, the price in Shaanxi was around 2,480 RMB/ ton, and the price in Shanxi was around 2,460 RMB/ ton. The price in Xinjiang was around 2,550-3,800 RMB/ ton.

Limited off-season demand, domestic LNG may continue to decline

SunSirs LNG analysts believe that the current market demand is limited in the off-season, pre-holiday LNG plant price cuts and promotions are obvious, maintenance support is fading, and it is expected that the domestic LNG market will continue to decline in the short term.

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