SunSirs: Liquefied Natural Gas (LNG) Prices Experienced a "Rising Tide" after falling 14% in a Row

1. Price Trend

Domestic liquefied natural gas (LNG) has been dropping for 12 days since November 2, and began to rise steadily on November 14, and then welcomed the new round of price rise. According to the data monitoring of SunSirs: on November 1, the average price of LNG was 4,750 RMB/ton, and on November 13, the average price was 4,046.67 RMB/ton. The LNG price dropped 14.81% for several days, while on November 14, the LNG price rebounded, the average price was 4,090 RMB/ton, 1.07% higher than the previous day, and 8.35% lower than the same period last year.

2. Market Analysis

At present, LNG price rebounds.

Product: according to the data monitoring of SunSirs, as of November 14, the LNG price of Inner Mongolia Erdos Xingxing Energy Co., Ltd. was 4,100 RMB/ton, and that of Inner Mongolia Etok Qianqi Shitai Natural Gas Co., Ltd. was 4,020 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 4,100 RMB/ton, that of Xinjiang Guanghui naomao Lake (east of Lanzhou) was 2,900 RMB/ton, that of Shanxi Qinshui Xinao was 3,850 RMB/ton, and that of Shaanxi Zhongyuan lvneng Natural Gas Co., Ltd. was 4,150 RMB/ton. The LNG price of Dazhou Huixin Energy Co., Ltd. WAS 3,700 RMB/ ton, and the price of LNG in various regions began to rise.

LNG goes up again when heating season comes

In recent days, the cold weather hit, LNG market also ushered in a turnaround. On November 15, central heating in northern cities officially started, and LNG prices in some northern areas began to rise in advance. Mainly due to the continuous decline of LNG price in the early stage and frequent cost inversion of the enterprise, the upstream enterprises have a high sentiment in view of the loss. With the rapid decline of LNG market in the early stage, it is possible for the market to store and copy the bottom, the shipment will gradually improve, the liquid level will gradually decrease, and the confidence of the operators will increase. On November 14, the bidding for Northwest LNG direct supply plant of CNPC began, with a total volume of 120 million m³of natural gas, among which the first transaction price of 80 million m³of natural gas was 2.2-2.25 RMB/ m³, and the second transaction price of 40 million m³of natural gas was 2.38 RMB/ m³, with a maximum price limit of 2.38 RMB/ m³, slightly lower than the previous round of bidding. This time, the bidding for the northwest raw material gas has been greatly adjusted, and the highest bid price has been limited. It is of great significance for stabilizing the LNG market and alleviating the contradiction of the heating season. In terms of receiving station, due to the impact of the suspension of loading of Rudong LNG port from November 15 to 20, the delivery of the surrounding receiving stations are smooth, which also drives the price of the surrounding LNG market price up.

As the weather turns cold, Beijing, Tianjin and Hebei have issued heavy pollution weather warning for many times. At present, the environmental protection requirements are relatively strict. We have actively built a clean, low-carbon, safe and efficient modern energy system, and made every effort to promote the consumption of clean energy. The pressure of environmental protection, "coal to gas" has stimulated the rapid growth of natural gas demand. However, LNG prices are too low this year, coupled with cost problems, manufacturers are willing to support the market. Due to the impact of low-cost imported LNG and bidding factors, there is limited space for rising.

Industry: according to the price monitoring of SunSirs, there were seven commodities in the list of commodity prices rising and falling on November 14, 2019, among which the top 3 commodities are LNG (1.07%), MTBE (0.62%) and WTI crude oil (0.56%). There were two kinds of commodities with a decline in the month on month ratio, the first two products with a decline were dimethyl ether (- 1.39%) and methanol (- 0.96%) The average rise and fall of this day was 0.05%.

3. Market Forecast

According to the LNG analyst of SunSirs, with the rapid drop of temperature in recent days and the arrival of central heating in the north, the heating demand will increase accordingly. In addition, factors such as bidding will benefit the LNG market. LNG is expected to rise in the future.

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