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SunSirs: Energy, Seven days up 7.58%, Liquefied Natural Gas (LNG) Market continue to Rise or Not?!

November 22 2019 17:31:59     SunSirs (Selena)

  1. Price Trend

China's LNG market has been rising since November 15, when the north China officially heating season begins. According to the data monitoring of SunSirs, the average price of LNG on November 14 was 4,090 RMB/ton, and on November 21 was 4,400 RMB/ton. The price of LNG rose 7.58% in 7 days, down 1.65% compared with the same period last year. On November 21, the LNG commodity index was 108.45, unchanged from the day before, 48.10% lower than 208.96 (December 25, 2017), the highest point in the cycle, and 57.52% higher than 68.85, the lowest point on October 7, 2019. (Note: cycle refers to 2012-09-01 to now)

  1. Analysis of Influencing Factors

Product: according to the data monitoring of SunSirs, as of November 21, the LNG price of Inner Mongolia Erdos Xingxing Energy Co., Ltd. was 4,450 RMB/ton, and that of Inner Mongolia Etok Qianqi Shitai Natural Gas Co., Ltd. was 4,250 RMB/ton. The LNG price of Xinjiang Qinghua Energy Group Co., Ltd. was 4,300 RMB/ton, that of Zizhou LNG plant of Shaanxi Lvyuan Natural Gas Co., Ltd. was 4,450 RMB/ton, that of Xinjiang Guanghui naomao Lake (east of Lanzhou) was 3,500 RMB/ton, that of Shanxi Qinshui Xinao was 4,150 RMB/ton, and that of Shaanxi Zhongyuan lvneng Natural Gas Co., Ltd. was 4,500 RMB/ton. The LNG price of Dazhou Huixin Energy Co., Ltd. was 3,950 RMB/ ton, and the price of LNG in various regions were up and down.

Market analysis: on November 15, central heating in northern cities officially started, with cold weather current coming, downstream demand gradually increased, and LNG price rose by chance. Since the third auction of Northwest raw materials on April 14, the production load of the plant has been adjusted, heating stimulates the market, and LNG prices have increased. Recently, China's LNG sea gas spot price has been increased, it is estimated that the spot CIF price equivalent to RMB is about 2,000-2,300 RMB/ ton. Due to the impact of low price and insufficient terminal receiving capacity, domestic LNG prices began to slow down, and some regions began to decline. At present, environmental protection is becoming more and more strict. Many provinces and cities in the north, such as Shanxi, Hebei, Shandong and Henan, are affected by the polluted weather. Some cities implement power rationing and power-off methods for production rationing enterprises, and the demand for industrial gas is affected. At the same time, gas vehicles under the Fourth National Congress are banned, traffic and transportation in some areas are blocked, shipments are not smooth, prices are under pressure, and market trading is not active.

This winter, the pipeline gas is relatively sufficient, and Sichuan LNG starts to be transported to the outside, with the situation that the gas from the South goes to the north. Recently, the imported LNG is affordable and of good quality. The ship schedule of the terminal is sufficient, and many wharves have a tentative upward trend. At present, most transactions in the market are focused on low price gas, which is also relatively scarce. Domestic LNG plants are in a difficult situation under the double pressure of no significant increase in cost pressure and terminal demand, so further decline is not ruled out.

Industry: according to the price monitoring of the business agency, on November 21, 2019, there were six commodities in the list of commodity prices rising and falling, among which WTI crude oil (3.44%), Brent crude oil (2.45%) and MTBE (0.90%) were the top 3 commodities. There were two kinds of commodities with a decline in the month on month ratio, and the first two products were asphalt (- 0.59%) and methanol (- 0.10%). The daily average was up or down 0.46%.

  1. Market Analysis

According to the LNG analyst of SunSirs, the arrival of central heating in the North has driven LNG up the road. However, due to the increasingly strict environmental protection and traffic congestion, it is expected that the short-term LNG will be dominated by weak consolidation.

 

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