SunSirs: The Price of Liquefied Natural Gas (LNG) Plummeted by 10.39%

1. Price Trend

Since the rapid rise of LNG caused by the northwest auction in late October, the price has been rising and falling in recent days. According to the data monitoring of SunSirs, the average price of LNG on November 1 was 4,750 RMB/ ton, and the average price on November 5 was 4,256.67 RMB/ ton, with a 10.39% drop in LNG price, down 5.41% compared with the same period last year.

2. Analysis of Influencing Factors

Products: According to the data of SunSirs, as of November 5, the LNG price of Inner Mongolia Ordos Xingxing Energy Co., Ltd. was 4,270 RMB/ton, and that of Inner Mongolia Etok Qianqi Shitai Natural Gas Co., Ltd. was 4,300 RMB/ton. The LNG price of Xinjiang Qinghua Energy Group Co., Ltd. was 4,000 RMB/ton, that of Zizhou LNG plant of Shaanxi Lvyuan Natural Gas Co., Ltd. was 4,300 RMB/ton, that of Xinjiang Guanghui naomao Lake (east of Lanzhou) was 3,200 RMB/ton, that of Shanxi Qinshui Xinao was 4,200 RMB/ton, and that of Shaanxi Zhongyuan lvneng Natural Gas Co., Ltd. was 4,200 RMB/ton. The LNG prices of all regions have been falling all over the country.

Market analysis: Recently, the LNG market has stopped rising and started to fall continuously. The large-scale skyrocketing market caused by the northwest auction was fleeting, and it continued to decline since November 2, and some manufacturers had a second price adjustment in a day. At present, some manufacturers need to buy high price gas source to maintain the power on, and some manufacturers need to wait and see. At present, the environmental protection is relatively strict, and we are actively building a clean, low-carbon, safe and efficient modern energy system. The downstream industrial gas demand is general, and the focus of transaction price is shifted down. Due to the limited downstream acceptance capacity, the liquid level of LNG plant is rising, which is unfavorable for shipment, and the manufacturer is under pressure to reduce the price. The overall market is still in a situation of oversupply. Under the double constraints of rising cost and no obvious demand boost in the downstream, further price reduction is not ruled out.

Industry: according to the price monitoring of SunSirs, there were eight commodities in the list of rise and fall of bulk commodity prices on November 4, 2019, with WTI crude oil (3.73%), Brent crude oil (2.42%) and MTBE (1.58%) as the top three commodities. There were seven kinds of commodities falling on a month on month basis, and one kind of commodities falling by more than 5%, accounting for 6.3% of the number of commodities monitored in this sector; the top 3 products falling were LNG (- 8.07%), coking coal (- 2.86%) and coke (- 2.00%). The daily average was - 0.31%.

3. Market Forecast

According to the LNG analyst of SunSirs, in recent years, natural gas has been declining one after another, and the pressure of middlemen's sales is too high. In order to reduce the price of goods, some middlemen's profits have been hung upside down, and they are relatively negative. It is expected that in the short term, the trend of LNG will be weak, or it will continue to bear the pressure of price reduction.

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