Last week, the spot price of LNG tracked by SunSirs followed a trend of initial decline followed by stabilization and a slight rebound, with prices ranging from 5,282 to 5,486 RMB/tonne throughout the week.

1. Decline Phase (July 1–3)

At the start of the week, prices continued their previous downward trend. On July 1, the quoted price was 5,486 RMB/tonne (a single-day drop of 2.04%); on July 2, it fell to 5,452 RMB/tonne (down 0.62%); and on July 3, it plunged 3.12% to 5,282 RMB/tonne—marking the week's low. This three-day consecutive decline fueled growing market pessimism.

2. Bottoming Out (July 4–5)

After hitting the low of 5,282 RMB/tonne, the market's downward momentum stalled; prices remained flat for two days (0.00% change). Essential downstream demand for restocking at low prices provided a floor, causing prices to enter a range-bound phase at the bottom.

3. Slight Recovery (July 6–7)

With market support evident at the bottom, prices began a slight recovery: on July 6, they rose 0.30% to 5,298 RMB/tonne; on July 7, they climbed another 1.06% to 5,354 RMB/tonne, ending the prolonged slump.

II. Analysis of Supply-Side Fundamentals

(i) Domestic LNG Plants: Inventory Declines, Prices Recover Slightly, but Upside Potential Remains Limited

Last week, the domestic LNG plant market showed clear marginal improvement. Following a period of sustained price cuts to clear inventory, plant storage levels receded to low-to-medium ranges, and shipment liquidity improved. Market sentiment recovered significantly from the pessimism seen earlier in the week. The cost-effectiveness of domestic gas supplies remained a key factor, supporting the spot market's shift from decline to rebound. However, the core factors constraining price increases remain unresolved: domestic end-user demand for residential gas is still in the traditional off-season, growth in industrial gas consumption is limited, and downstream procurement is restricted to essential restocking without significant bulk stockpiling. Inventory pressure at liquefaction plants has eased only temporarily; consequently, the price rebound lacks momentum, and there is insufficient drive for a sharp short-term surge. Domestic gas prices are expected to stabilize gradually, characterized primarily by narrow fluctuations.

(II) Imported LNG Terminals: High Inventory Pressure and Ongoing Competition

Last week, the market for imported LNG showed mixed price movements; stable supply from import terminals acted as a key factor limiting the overall rise in LNG prices.

Although prices at domestic liquefaction plants edged upward, large volumes of low-priced imported LNG continued to flow into key consumption regions. This direct competition between imported and domestic gas sources has consistently squeezed the room for domestic price hikes. Nevertheless, as domestic supply stabilizes and recovers, bearish sentiment has notably weakened, giving way to a tug-of-war between bulls and bears, with expectations for a moderate upward trend in the medium to long term.

In the short term, LNG prices are likely to undergo a mild, gradual recovery while fluctuating within a narrow range at low levels; a sharp, sustained rally is unlikely to materialize. A trend reversal—leading to a sustained rise—can only be confirmed if the price spread (between imported and domestic gas) continues to narrow and eventually flips from negative to positive; for now, the market is primarily characterized by bottom-range oscillation.

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