The price of natural gas is hard to fall in the period of resurgence of LNG market

 The price of natural gas is hard to fall in the period of resurgence of LNG market

According to Baichuan Yingfu monitoring, on November 2, the average price of domestic LNG (liquefied natural gas) was 3790 yuan / ton, up more than 40% compared with the beginning of October. However, this trend of rising in the peak season did not last.

Since the beginning of November, the average ex factory price of LNG has been going down all the way, and the daily decline in some regions has reached 200 yuan / ton. In view of the current price trend and future direction of LNG market, some people in the industry said they could not understand it. Zhuo Chuang information analyst Chen zhaojuan said.

Before the National Day holiday, the price of domestic LNG market rose all the way, and the increase became more obvious after the holiday. The national average ex factory price of LNG once rose to a high of 3874 yuan / ton. When everyone speculated whether the price could exceed 4000 yuan / ton, the market situation began to change.

According to Zhuo Chuangs statistics, from the beginning of the market to the highest price in early November, the early price rise reached 33.43%. As of November 19, the national LNG ex factory price was 3702.6 yuan / ton, 4.42% lower than the peak in early November.

The monitoring data of the business agency also showed that the average price of domestic LNG on November 19 was 3416.67 yuan / ton, down 22.93% compared with the same period last year.

Domestic LNG has been in a continuous downward trend since the beginning of November. Prices in many places are generally around 50-150 yuan, which has opened a downward channel. Tong he, an analyst with business club LNG, said.

According to the data on November 19, the average price in Inner Mongolia was around 3360 yuan / ton, falling by 50-230 yuan / ton; in Shaanxi, the average price was around 3500 yuan / ton, falling by 50-160 yuan / ton; in Shanxi, the average price was around 3820 yuan / ton, falling by 50-150 yuan / ton; in Xinjiang, the average price was around 3380 yuan / ton, falling by about 100 yuan / ton, and the liquid prices were generally down. As of the afternoon of November 23, the average price of domestic LNG has dropped to around 3300 yuan / ton, and the market decline is still continuing.

Loose supply

In December 2017, affected by the tight market supply, the price of liquefied natural gas (LNG) in some parts of China once reached a sky high price of 10000 yuan per ton. With the comprehensive heating in northern China this year, LNG has entered the traditional peak demand season. Why is the price low?

Tong he believes that due to the rapid price rise in the early stage, insufficient follow-up of the demand side of the LNG market, and the emergence of the downstream resistance psychology, some end users prefer alternative energy sources, and their enthusiasm for purchasing liquefied natural gas has declined, and the delivery of liquid plants in many places is not smooth, and the price continues to fall.

In addition, in mid November, the Norths overall heating and raw gas auction were not expected to be favorable. At the same time, due to the emergency response to heavy polluted weather in some areas such as Hebei and Henan, the production of industrial users decreased and the demand continued to decline. In addition, the cold air hit and the rain and snow weather affected the logistics, the manufacturers shipment may continue to be under pressure.

In terms of supply, after the coming of heating season this year, the overall balance of supply and demand of natural gas is better than that in previous years.

Chen zhaojuan introduced that the statistical data showed that Chinas total natural gas supply in the first three quarters was 241.4 billion cubic meters, a year-on-year increase of 5.55%. Overall, the balance of supply and demand of natural gas in China this year is better than that of last year. In addition, the underground gas storage has completed the gas injection task ahead of schedule, and it is expected that the domestic natural gas resources supply will be abundant throughout the year.

From the international perspective, in the early stage, due to the rise in the relevant natural gas indexes in Europe and North America related to the Asian market, it played a certain supporting role in the spot CIF price in Asia. However, in the later stage, with the aggravation of the epidemic situation in Europe and the United States and other regions, the international demand for liquefied natural gas has weakened, and the situation of loose supply in the international natural gas market has intensified In addition, some comments such as warm winter in the market have also increased the attitude of terminal customers to wait-and-see. In the case of weak customer follow-up, the CIF price of imported spot goods at the receiving terminal has declined, which is also an important reason for the decline of domestic LNG market. She said.

Since the beginning of November, the situation of the national LNG market began to change, and the overall situation showed a downward trend. First, after the continuous rise in October, the price of the market has been at a relatively high level, and there is pressure on the downstream to receive goods; second, the downstream has been prepared in advance, the market demand increment is limited, and most factories mainly reduce prices to discharge inventory; third, the bidding results of Northwest feed gas in early November are lower than the expected impact, and there is no support for the upward market price; the impact of heavy pollution weather and rain and snow weather will also be at the same time To some extent, the price rise will be restrained.

Market weakness

Gas shortage is no longer, and the trend of LNG market this winter is not optimistic.

In terms of market supply, some liquefied natural gas plants with peak shaving storage in the LNG plant have been shut down, and some receiving stations have also increased a certain amount of gasification export supply. Therefore, the winter supply capacity has declined compared with the previous period, but the overall supply is relatively abundant. In terms of demand, the market demand has been at a high level. Recently, due to the impact of heavy pollution weather, the demand of downstream industries in some areas has decreased, which is also one of the factors leading to the current weak market price rise. Although the current increase in heating demand has been limited due to the positive replenishment of urban combustion in the early stage, the arrival of a new round of cold air in northern China may still be improved to a certain extent The sales volume of urban fuel supports the price. Chen zhaojuan analysis that.

Recently, the rain and snow weather in some parts of northern China will bring problems such as road obstruction and factory shipment obstruction. It is not ruled out that some factories may reduce prices and arrange warehouses in advance in order to prevent the increase of inventory pressure under the condition of considering this factor. But on the whole, prices may continue to fluctuate slightly in the short term.

Tong he also believes that at present, the domestic LNG market is not expected to be good, many places are affected by emergency response to heavy pollution weather and other factors, and the industrial demand continues to decline. In addition, cold air strikes, rain and snow weather affect logistics, and manufacturers shipment may continue to be under pressure. It is expected that the domestic LNG market will be weak.