China's LNG Market Rises Steadily Amid Little Inventory Pressure

Price trend

On March 11, the average price of domestic LNG was 7,278 CNY/ton, an increase of 258 CNY/ton from the price of 7,020 CNY/ton at the beginning of the week, an increase of 3.68% during the week, and an increase of 118.75% compared with the same period last year.

Analysis of Influencing Factors

This week, the domestic LNG market rose steadily, with an increase of more than 3% during the week. Inner Mongolia, Shaanxi, Shanxi and other places actively raised the price, and the market focus moved up again. This week's rise in liquid prices is mainly due to the high price of imported gas and low volume, resulting in an increase in the sales radius of domestic liquid plants, no pressure on corporate sales, and controllable inventories. However, since the market demand is gradually entering the off-season and the follow-up force is average, the increase rate is not large. The average price rises less than 300 CNY/ton during the week, and some areas are slightly lowered at the weekend, and the market fluctuates. The auction ended on March 9, and the 20 million square meters of resources were all sold at a price of 4.21-4.23 yuan per square, with no unsold auctions. At present, it is 6900-7550 CNY/ton in Inner Mongolia, 7230-7450 CNY/ton in Shaanxi, 7200-7560 CNY/ton in Shanxi, 7050-7330 CNY/ton in Ningxia, 7600-8000 CNY/ton in Hebei, 7550-7550 yuan in Henan. 7900 CNY/ton, the price of the receiving station is about 6600-9750 CNY/ton. China's LNG spot CIF price is $39.65/MMBtu, and the price is lowered.

According to the weekly change from December 13, 2021 to March 6, 2022, it can be seen that the domestic LNG cycle is mixed, rising in December, and starting to fall in January. After the Spring Festival, the price rose sharply, 2 It increased by 37.41% in the week of May 7.

Most downstream products rose:

Methanol, the methanol market in Dongying area of Shandong fell to 3000-3100 CNY/ton to the spot exchange, and the transaction was light. The methanol market in Shandong Luzhong area fell to 3050-3100 CNY/ton for cash exchange, and the local methanol factory in central Shandong was stable at 3300 CNY/ton for cash exchange, and the transaction was still light. The reference price of methanol in southern Shandong is around 3,150 CNY/ton for factory withdrawal, and the reference price for local goods in Linyi is around 3,150 CNY/ton for delivery to spot exchange, and the price of logistics goods is lower. The enthusiasm for receiving goods downstream is not high.

Urea, the domestic comprehensive price of urea rose slightly on March 10, up 93 CNY/ton compared with the price on March 7, an increase of 3.32%, and an increase of 38.12% over the same period last year. The prices of upstream coal and liquefied natural gas fell slightly, and the cost support was general. From the demand side: agricultural demand waits and sees, industrial demand strengthens. Spring ploughing is approaching, domestic fertilizer use is entering the peak season, and dealers are actively buying goods. After the end of the Winter Olympics, compound fertilizer factories and sheet metal factories will gradually resume work, and follow up on dips in moderation. 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 more than 160,000 tons, and the supply is sufficient. On the whole, the cost of urea is generally supported, the downstream demand is strengthened, the supply of urea is sufficient, and the urea will rise slightly in the market outlook.

Market outlook

At present, the inventory of the liquid plant is controllable, the sales pressure is not large, and the superimposed cost support is favorable for the domestic liquid price to rise. However, considering the downstream cargo receiving capacity, it may curb some of the increase.