SunSirs: China Domestic LNG Market first Suppressed and then Rose n December (12.1-12.28)

According to the Commodity Market Analysis System of Shengyishe, as of December 28th, the average price of LNG in China was 5,510 RMB/ton, which is 6,556 RMB/ton compared to the average price on December 1st. The decline in domestic LNG prices this month was 15.95%.

This month, domestic LNG prices first fell and then rose. In the first half of December, raw gas prices significantly decreased, cost support weakened, and liquid prices concentrated in a decline. Rainy and snowy weather is approaching in many parts of China, leading to poor transportation and restricted market supply of goods. 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. In the second half of December, there was a slight increase in raw gas prices, increasing cost support and driving up liquid prices. After snowfall, traffic flows smoothly. Frequent cold air attacks in China have been affected by cooling weather in many areas, leading to a significant increase in downstream replenishment demand and a continuous rise in LNG prices. In terms of sea and gas, some receiving stations have raised prices.

According to the weekly K-bar chart from October 2, 2023 to December 18, 2023, it can be seen that domestic LNG prices fluctuated in December. The maximum increase in December was 10.37% in the week of December 18, and the maximum decrease in December was -9.56% in the week of December 11.

LNG analysts from SunSirs believe that as the New Year holiday approaches and hazardous chemical vehicles are about to be restricted on highways, liquid plants have a strong attitude towards discharging their inventory. Tomorrow, a new round of bidding for raw gas will begin, with the market mainly observing. Expected short-term consolidation of domestic LNG prices.

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