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SunSirs: Light in the Off-season, LNG market remains unchanged to cope with changes

July 20 2020 14:01:02     SunSirs (Selena)

According to the data of SunSirs, the average price of LNG on July 16 was 2,463.33 RMB/ ton, which was flat compared with the previous day, increased by 0.82% compared with the beginning of the month, decreased by 1.6% on a month on month basis, and decreased by 23.02% compared with the same period last year.

Analysis of Influencing Factors

Since July 10, the benchmark price of feed gas for conventional LNG plants in Shaanxi, Ningxia and Inner Mongolia directly supplied by PetroChina has remained at 1.34 RMB/ m3. Most enterprises' profits have shrunk, and the liquid price has hovered around the cost line. Enterprises have adjusted their quotations in a narrow range according to the inventory and shipment situation. The wait-and-see psychology is rising. The demand in the off-season is still poor and the market supply is sufficient.

According to the National Bureau of statistics, in June, natural gas production was 15.2 billion m³, an increase of 11.3% year-on-year, 1.4% lower than that of the previous month, and the average daily output was 510 million m³. In the first half of July, 94 billion m³ of natural gas were produced, with a year-on-year increase of 10.3%, 1.2% faster than that in the first quarter. Imported natural gas was 8.33 million tons, with a year-on-year increase of 10.8%. In the first half of July, imported natural gas was 48.36 million tons, with a year-on-year increase of 3.3%, 1.5% faster than that of the first quarter. Natural gas production has maintained a rapid growth, and import growth has accelerated significantly.

As of July 16, the average price of LNG in China was 2,463.33 RMB/ ton, the price in Inner Mongolia was 2,430-2,500 RMB/ ton, the price in Shaanxi was 2,460-2,500 RMB/ ton, the price in Shanxi was around 2,500 RMB/ ton, and the price in Xinjiang was around 3,500 RMB/ ton.

In July, the downstream methanol market rose slightly, and the domestic methanol market maintained a narrow adjustment in the short term. The liquid ammonia market will remain weak, and it is not ruled out that the price will go down again. The short-term urea market will rise slightly, and dichloromethane will be dominated by horizontal consolidation.

Maarket Forecast

LNG analysts from SunSirs believe, in the off-season, the domestic natural gas market is still in oversupply, and the overall situation is weak. At present, there is no good news to boost the market. Considering the production cost, enterprises support the price and wait and see the market. It is expected that China domestic LNG market will continue to stay low in the short term with little change.


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