Strong Support For Cost Demand, LNG Prices Rise

Price trend

On February 21, the average price of domestic LNG was 7,500 CNY/ton, an increase of 2,116 CNY/ton from the average price of 5,383.33 CNY/ton last Monday, an increase of 39.32%, and an increase of 158.62% compared with the same period last year.

Analysis of Influencing Factors

Recently, the domestic liquefied natural gas market has continued to climb, and the price has risen above 7,000 yuan, breaking the 8,000-yuan mark in many places, and the domestic liquefied natural gas market has risen sharply. This round of price increases is mainly due to the increase in the price of raw gas, and the recent cooling has been obvious, the demand for urban gas has increased, and the support on the demand side has been strengthened. Some areas have limited gas and limited supply, and there is also support on the supply side. The sentiment of price support is strong, with an increase of 12.38% last week. After the two-day increase over the weekend, the liquid price continued to rise on the 21st, with a single-day increase of 23.97%, and the focus shifted upward. The Shaanxi-Mongolia-Ganning liquid plant directly supplied by PetroChina held an auction for raw gas from February 23 to 28. The final transaction price was 4.63-4.76 yuan/m3, an increase of 0.94-1.05 yuan/m3, and the final transaction volume was 6 million m3, with no flow. shoot. At present, it is 7400-8000 CNY/ton in Inner Mongolia, 7130-8000 CNY/ton in Shaanxi, 7500-7800 CNY/ton in Shanxi, 7400-7530 CNY/ton in Ningxia, 8200-8500 CNY/ton in Hebei, 7900-7900 yuan in Henan. 8500 CNY/ton, the price of the receiving station is about 6300-8800 CNY/ton. China's LNG spot CIF price was $24.2971/MMBtu, and the price was raised.

According to the weekly rise and fall from November 29, 2021 to February 20, 2022, it can be seen that the domestic LNG cycle rose and fell, with a drop of 15.97% on December 6, and then rose in the past month. It began to fall, and the price rose sharply after the Spring Festival, with an increase of 37.41% in the week of February 7.

The overall rise in downstream products:

Methanol, the domestic methanol market has been running in a downturn recently, and the entire trend is still in a downward trend. The domestic methanol market sentiment is weak, while the coastal market is a little firmer. Supported by the demand for replenishment, the factories in the main producing areas dropped in early last week, and many of them stopped selling. However, the weakness of the futures market has seriously suppressed the receiving price and market sentiment of the downstream in the mainland, and the terminal market price did not rebound as scheduled; During the week, the logistics was tight, and the freight continued to rise, making it difficult for traders to make profits.

Liquid ammonia, at the beginning of the week, the Shandong liquid ammonia market rebounded, and the market price generally rose, with an increase of around 100 yuan. Market inventory pressure eased slightly and increased, and downstream inquiries were normal. Today, most major factories in Shandong have raised their quotations, with an increase of up to 100 yuan. Manufacturers ship normally, and the shipment volume is lower than last week. At present, the market demand is acceptable, many dealers follow the market, downstream purchases are normal, and the market inventory continues to deplete. Today, the mainstream price in the region is 4100-4300 CNY/ton. It is expected that the market may still have room for upside in the near future.

Urea, upstream coal prices fell slightly, liquefied natural gas prices rose sharply, and cost support strengthened. From the perspective of demand: Affected by buying up and not buying down, agricultural demand waits and sees. Affected by the Winter Olympics, industrial demand weakened. Spring ploughing is approaching, and domestic fertilizer use has entered the peak season. However, the price of urea has dropped slightly recently, and the dealers are not active in purchasing goods. Affected by the Winter Olympics, the resumption of work of some compound fertilizer factories and sheet metal factories has been postponed. They will resume work after the end of the Winter Olympics on the 20th, and industrial demand is about to increase. The downstream market price of melamine has dropped slightly after a sharp rise, and the enthusiasm for urea purchase has weakened. From the perspective of supply: the current daily output of urea is about 160,000 tons, and the supply is sufficient. On the whole, urea cost support is strengthened, downstream demand is about to increase, urea supply is sufficient, and urea will rise slightly in the market outlook.

Market outlook

At present, led by the strong support of cost and demand, the domestic liquid price has risen sharply, and the liquid factory has a strong sentiment to support the price. There is still a certain possibility of the price rising under the positive support in the short term.