SunSirs: Cost Driven, China LNG Market Surged in October

According to the Commodity Market Analysis System of SunSirs, the prices of LNG in China have significantly increased this month. As of October 31, the average price of LNG in China was 5,270 RMB/ton, which is 23.48% higher than the average price of 4,268 RMB/ton on October 1.

The price of LNG in China has fluctuated and increased this month. The price of raw gas has risen, and cost support is good. Liquid plants have raised prices one after another. In terms of sea and gas, some receiving stations have seen a concentrated upward trend in LNG prices, driven by a combination of sea and land.

Cost side: Rising raw gas prices drive up liquid prices

On the afternoon of October 9th, the bidding price for raw gas from PetroChina Northwest Liquid Plant in mid October (October 11-October 20th) was 2.63 to 2.68 RMB/square meter, with a lower price increase of 0.28 RMB/square meter compared to the previous period and a higher price increase of 0.25 RMB/square meter compared to the previous period. All 95 million cubic meters were sold.

On the afternoon of October 19th, the bidding price for raw gas at PetroChina Northwest Liquid Plant in late October (October 21-October 31) was 2.86-3.01 RMB/square meter, with a lower price increase of 0.23 RMB/square meter compared to the previous period and a higher price increase of 0.33 RMB/square meter compared to the previous period. All 104.5 million cubic meters were sold.

On the afternoon of October 30th, the bidding price for raw gas at PetroChina Northwest Liquid Plant in early November (October 31-November 10th) was 3.32-3.39 RMB/square meter, with a lower price increase of 0.46 RMB/square meter compared to the previous period and a higher price increase of 0.38 RMB/square meter compared to the previous period. All 11 million cubic meters were sold.

Demand side: The heating season is approaching and the demand needs to be improved

After the National Day holiday, the weather turned cold, with some areas experiencing rain and snow, and the willingness to replenish downstream reservoirs has increased. Recently, the temperature has been relatively mild, and market trading has been average. Downstream procurement is mainly based on demand. The heating season is approaching, and demand needs to be improved in the later stage.

LNG analysts from SunSirs believe that due to increased costs, the domestic LNG price has risen sharply in recent days. At present, the market has smooth shipments and a strong attitude towards price support, but the downstream delivery capacity is limited after the significant increase in liquid prices. It is expected that the short-term increase in LNG prices will be limited, with consolidation and operation being the main focus.

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