SinSirs: Liquefied Natural Gas (LNG) Prices soared 23.7% in a Single Day

1. Price Trend

With the completion of the northwest raw gas auction, the domestic LNG market soared in a large scale almost overnight, reaching a high level in an instant. According to the data monitoring of SinSirs, the average price of LNG on October 30 was 3,840 RMB/ ton, and the average price on October 31 was 4,750 RMB/ ton, up 23.7%, nearly 1,000 RMB per day, down 8.63% compared with the same period last year.

2. Analysis of Influencing Factors

Products: According to the data of SunSirs, as of October 31, the LNG price of Inner Mongolia Ordos Xingxing Energy Co., Ltd. was 4,700 RMB/ton, and that of Inner Mongolia Etok Qianqi Shitai Natural Gas Co., Ltd. was 4,800 RMB/ton. The LNG price of Xinjiang Qinghua Energy Group Co., Ltd. was 3,500 RMB/ton, that of Zizhou LNG plant of Shaanxi Lvyuan Natural Gas Co., Ltd. was 4,700 RMB/ton, that of Xinjiang Guanghui naomao Lake (east of Lanzhou) was 3,700 RMB/ton, that of Shanxi Qinshui Xinao was 4,800 RMB/ton, and that of Shaanxi Zhongyuan lvneng Natural Gas Co., Ltd. was 4,750 RMB/ton. The liquid price of all regions has increased significantly.

Market analysis: on October 30, the starting base price of Northwest raw gas auction was raised to 1.57 RMB/ m3, and the final transaction price was 2.6-2.75 RMB/ m3. The volume of bidding and listingwas 100 million m3, 80 million m3 less than that of the last time. Driven by the rising cost, the domestic LNG price rose sharply, which rose nearly 1000 RMB overnight, with multiple terminals linked and rising. The scope of this surge was almost national and large-scale, and it was also a large one-day increase in recent years. With the start of heating in winter, some areas have started to replenish the urban fuel, and the demand has gradually increased. With the support of multiple advantages, the awareness of upwelling price of LNG has become more and more strong. This year's supply and demand form has roughly presented a "tight balance" state. Faced with such high prices of natural gas, the end-users have a relatively heavy psychological resistance, which is difficult to accept in a short time. At present, the inventory of liquid plants is on the high side and the sales pressure is exposed. This crazy price increase situation needs to be treated rationally.

Industry: according to the price monitoring of SunSirs, on October 31, 2019, there was one kind of commodity in the list of commodity price rise and fall in energy sector, with LNG rose (23.70%). There are nine commodities falling on a month on month basis, with Brent crude oil (- 1.59%), WTI crude oil (- 0.86%) and gasoline (- 0.69%) as the top three products. The daily average was up or down 1.13%.

3. Market Forecast

According to the LNG analyst of SunSirs: at present, it is in seasonal consumption, heating in winter, and the market demand has increased. The rise of gas source price directly drives the increase of production cost, and LNG price has risen sharply under the support of multiple advantages. It is expected that LNG trend will be strong in the short term, and the future market needs to be treated rationally.

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