Overall market situation

Price trend: As of February 5th, the benchmark price of liquefied natural gas in SunSirs was 3,728.00 RMB/ton, an increase of 3.27% compared to the beginning of this month (3,610.00 RMB/ton). On February 6th, the market as a whole remained stable, with an average shipping price of 4,166.04 RMB/ton for domestically produced liquefied natural gas and 4,687.69 RMB/ton for imported liquefied natural gas.

Supply and demand pattern: As the Spring Festival approaches, core demand areas such as industrial production and logistics transportation are gradually entering a contraction stage, and the liquefied natural gas market is showing an overall trend of oversupply.

In depth analysis of supply and demand

Supply side: As of February 4th, the overall external operating rate of 133 liquefied natural gas plants in China remained at 51%. The supply capacity is stable, but upstream is facing pressure to discharge inventory, and some liquid plants and receiving stations have chosen to reduce prices for promotions.

Demand side: The industrial shutdown and logistics rest before the Spring Festival have led to a continuous decline in terminal procurement demand. Although the heating demand in some areas due to cooling has provided some support for prices, the overall weak demand is the dominant factor.

Regional market differentiation

Northern market: In early February, there was an increase in demand for civilian heating due to cold air, and some liquid plant prices were slightly raised. But with the overall decline in pre holiday demand, its price advantage has decreased and shipments have weakened.

Southern market: Demand contraction is more pronounced, especially in some receiving stations in East and North China where inventory pressure is high, and shipments are falling due to the impact of domestic gas price reductions. The prices in the southwest region were relatively high in the early stage, but there was a significant decline last week.

In summary, downstream demand is expected to further shrink before the Spring Festival, with strong upstream inventory intentions and a lack of favorable market support. It is expected that domestic liquefied natural gas prices will continue to be under pressure in the short term, showing a trend of "high prices compensating for the decline". This week, the liquefied natural gas market was dominated by the Spring Festival effect, with demand side contraction becoming the core contradiction. It is expected that the market will continue to operate weakly and steadily before the holiday, and there will still be downward pressure on prices.

If you have any enquiries or purchasing needs, please feel free to contact SunSirs with support@sunsirs.com.