SunSirs: Cooling Weather & Weakening of Feed Gas, Continuous Decline of China LNG Market (December 8-14)

According to the Commodity Market Analysis System of SunSirs, the domestic LNG prices have fallen this week. As of December 14th, the average price of LNG in China was 5,062 RMB/ton, which is a decrease of 11.72% compared to the average price of 5,734 RMB/ton on December 8th.

The domestic LNG prices have dropped significantly this week. This week, many parts of China experienced rainy, snowy, and cooling weather, resulting in poor transportation and restricted market supply and circulation of goods. At present, there is a large amount of inventory in the market, and downstream demand is weak. Liquid factories have a strong attitude towards inventory reduction and are willing to reduce prices, resulting in a continuous decline in liquid prices. In terms of sea and gas, some receiving stations have lowered their prices. On the afternoon of December 13th, in the third week of December (December 15th to December 21st), the bidding price for raw gas from PetroChina Northwest Liquid Plant was 3.25-3.4 RMB/cubic meter. The low price was reduced by 0.05 RMB/cubic meter compared to the previous period, and the high price was reduced by 0.1 RMB/cubic meter compared to the previous period. All 62.16 million cubic meters were sold. The price of raw gas has decreased, cost support has weakened, and liquid prices continue to fall.

LNG analysts from SunSirs believe that the domestic LNG price trend has continued to weaken in recent days. At present, the market supply is sufficient, and downstream procurement demand is insufficient. The market supply exceeds demand. The price of raw gas has fallen, and cost support is insufficient. Under the influence of bearish factors, it is expected that domestic LNG prices will be weak and consolidate in the short term.

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