SunSirs: Cold Weather Leads to High Inventory, Exacerbating Regional Differentiation in China Domestic LNG Market

Price trend:

Stable but rising in the north: Affected by sustained low temperature weather, the demand for heating in the northern region is strong, supporting the consumption of LNG. Liquid factories in Shaanxi, Inner Mongolia, Ningxia and other places have been shipping smoothly, with prices increasing by 20-70 RMB/ton. As of January 8th, the benchmark price of liquefied natural gas in SunSirs was 3,256.00 RMB/ton, an increase of 0.99% compared to the beginning of this month (3,224.00 RMB/ton).

Southern weakness stabilizes: The supply of receiving stations in southern regions such as East China and South China is sufficient, and there is competition for low-priced resources in the surrounding areas. The market demand is relatively stable, and prices lack upward momentum, with overall narrow fluctuations being the main trend.

Supply and demand side:

The overall market is in a state of 'supply exceeding demand'. Although the demand in the north has been boosted by the warming weather, the inventory of upstream liquid plants and receiving stations is still relatively high, limiting the room for price increases. Although upstream enterprises have the willingness to raise prices, downstream users' ability to receive goods and their acceptance of prices constitute constraints.

International costs:

Recently, the international spot LNG prices have risen, pushing up import costs, which has provided some support for the shipping prices of domestic coastal receiving stations, limiting their downward space.

Short term outlook:

In the short term, the market is expected to maintain its current pattern, but the following variables need to be closely monitored:

The core contradiction in the price trend of the northern market lies in the game between "demand boost" and "high inventory pressure". If the cold weather persists, prices may remain firm; If the weather warms up or if upstream companies offer discounts to reduce inventory, prices may face downward pressure.

Southern market: Against the backdrop of abundant supply, it is expected to continue to operate mainly in a stable or weak manner, with insufficient upward momentum.

It is worth noting that the global LNG market is undergoing changes. It is expected that a new wave of supply will emerge in 2026, which may change the market balance in the long run. At the same time, China is advancing the process of listing LNG futures, aiming to enhance its voice in global energy pricing and provide important risk management tools for domestic enterprises.

In summary, the recent regional differentiation in the LNG market is a direct reflection of the collision between seasonal demand and overall loose fundamentals. The future trend will highly depend on weather changes, upstream inventory consumption progress, and the transmission of international prices.

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