SunSirs: China Domestic LNG Prices fluctuated and fell in the First Half of 2023

According to the Commodity Market Analysis System of SunSirs, as of June 30, the average price of LNG in China was 4,296 RMB/ton, which is 6,174 RMB/ton compared to January 1. In the first half of 2023, the price of LNG in China decreased by 30.44%.

In the first half of the year, the price of LNG in China fluctuated, with significant declines. The largest decline occurred in March, with a decline of 28.03%. June saw the highest increase, with a growth rate of 14.56%.

The price of LNG in China fluctuated and fell in the first half of 2023

In the first quarter, domestic LNG prices sharply declined in January and quickly rose. Downstream demand weakens before the Spring Festival. The domestic rainy and snowy weather has hit, transportation has been hindered, and the market's inventory mentality has increased. LNG has started to decline. After the Spring Festival, transportation resumed smoothly, downstream replenishment demand increased, and LNG prices rapidly increased. In February, domestic LNG prices first fell and then rose. In early February, the market fully resumed work after the holiday, with an increase in on-site supply and limited downstream replenishment demand. The market began to oversupply. Due to traffic congestion caused by rainy and snowy weather in some regions of China, liquid factories have reduced prices for sales. Due to the impact of cold air in mid February, downstream replenishment demand increased. The increase in raw gas prices and cost assistance have led to an increase in domestic liquid prices. In March, the domestic temperature gradually rose, and the demand for LNG in the market decreased. Liquid plants have reduced prices and discharged them into storage. Some downstream enterprises have shut down production and reduced industrial demand, resulting in a higher number of heavy vehicles in the market. The terminal demand continues to be weak, and there is a clear oversupply situation in the market. In addition to the decrease in raw gas prices, the price of LNG continues to decline. Affected by the continuous price reduction of domestic gas, Haiqi also followed the downward trend.

In the second quarter, domestic LNG prices fluctuated in April, with overall fluctuations and increases. In mid April, after a continuous decline in domestic LNG prices, it remained at a low level. Downstream replenishment demand increased, and LNG prices stopped falling and rising. The increase in raw gas prices has led to positive cost support and a strong bullish atmosphere in the industry. In May, domestic LNG prices fluctuated and fell. The market supply exceeds demand, with weak trading on the market, strong willingness of liquid plants to discharge inventory, and a decrease in the price of LNG. Coupled with the decline in costs, the price of LNG continues to weaken. Currently in the off-season, natural gas demand is performing poorly, with downstream restocking on demand and limited market transactions. In terms of sea and gas, the LNG price at the receiving terminal has been lowered. The price of LNG in China fluctuated and increased in the month. In June, some liquid plants underwent maintenance, resulting in a decrease in market supply. Coupled with the increase in raw gas prices and favorable cost support, LNG has started a continuous upward trend. The demand for downstream restocking has started to increase, and the market has a strong mentality of favoring prices. With the arrival of high-temperature weather in many parts of China, demand has increased, and the LNG market continues to rise.

LNG analysts from SunSirs believe that the price trend of LNG has been declining recently. At present, the market has sufficient supply and terminal demand is sluggish. Affected by the decrease in sea and gas prices, liquid prices have started to decline. It is expected that the domestic LNG market will mainly operate weakly in the short term.

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