In October, the price soared by 70% and then fell sharply. The LNG market is too exciting!

I. price trend


In October, the domestic LNG market ushered in a sustained surge, and at the end of the month, the LNG market experienced the biggest one-day surge. According to the data monitoring of business agency, the average price of LNG on October 1 was 2793.33 yuan / ton, and the average price on October 31 was 4750 yuan / ton. In the month, the price rose nearly 2000 yuan, or 70.05%, which was crazy. As of November 7, the average price of LNG was 4126.67 yuan / ton, down 13.12% compared with the average price of 4750 yuan / ton on November 1, and down 5.3% compared with the same period last year. It can be said that the price of LNG was going up crazily and down sharply.


II. Analysis of influencing factors


Product: according to the data monitoring of business agency, as of November 7, the LNG price of Inner Mongolia Erdos Star Energy Co., Ltd. is 4100 yuan / ton, and the LNG price of Inner Mongolia etokeqian banner Shitai Natural Gas Co., Ltd. is 4200 yuan / ton. The LNG price of Xinjiang Qinghua Energy Group Co., Ltd. is 4000 yuan / ton, that of Zizhou LNG plant of Shaanxi Lvyuan Natural Gas Co., Ltd. is 4100 yuan / ton, that of Xinjiang guanghuinaomao Lake (east of Lanzhou) is about 2950 yuan / ton, that of Shanxi Qinshui Xinao is 4150 yuan / ton, that of Dazhou Huixin energy is 3800 yuan / ton, and that of Shaanxi Zhongyuan lvneng Natural Gas Co., Ltd It is 4080 yuan / ton, and the price of liquid in various regions has fallen sharply.


Market analysis: in October, the domestic LNG market began to improve. After the National Day holiday, the road transportation recovered smoothly, the downstream began to actively replenish goods, the terminal demand increased. In addition, the weather turned cold, the northern cities gradually entered the winter heating period, the urban gas procurement LNG supply, the LNG sales were hot, some liquid plants due to the low liquid level in the early stage and heating Quarter expectations, strong price push. On October 15, CNPC conventional liquid plant bid for feed gas, starting at 1.41 yuan / m3, gas volume 180 million m3. The rising gas source, a slight reduction in the overall market supply, as well as the intentional increase in logistics freight, also support the upward momentum of LNG. Since then, in the middle and last ten days of October, LNG has maintained the trend of shock and stability, with different ups and downs, but the market as a whole has remained stable. This state of stability was broken at the end of the month. On October 30, the starting base price of Northwest feed gas auction was raised to 1.57 yuan / m3, and the final transaction price was 26-2.75 yuan / m3. The volume of registered orders in the auction was 100 million cubic meters, 80 million cubic meters less than that of the last time. Driven by the rising cost, the domestic LNG price rose sharply, which rose nearly 1000 yuan overnight, with multiple terminals linked and rising, as well as the receiving stations around the country. The scope of this surge is almost national and large-scale. It is also a large one-day increase in recent years, and the market as a whole is “rising”.


However, such a rise did not last for a long time, just like a flash in the pan. It only lasted for three days and then rose and fell back. Since November 2, there have been successive falls all over the country. There are many secondary price adjustments in a day. At present, some manufacturers need to buy high price gas source to maintain the power on, and some manufacturers need to wait and see. The sudden surge at the end of October was unexpected. In addition to the cost increase, there are also market sentiment driven factors. Currently, there is no obvious positive support for the terminal, and LNG short-term price surge lacks practical support.


This year, more efforts have been made to ensure the supply of natural gas. The policy of “gas based transformation, coal based transformation, electricity based transformation and gas based transformation” pays more attention to the coordination of resources. From the central government to the local government, the balance between the supply and demand of natural gas is better than before, and the people’s livelihood can be effectively guaranteed. This winter’s natural gas supply is relatively sufficient, “three barrels of oil” has done a lot of work this year. According to the National Bureau of statistics, in the first three quarters of this year, China produced 127.7 billion cubic meters of natural gas, a year-on-year increase of 9.5%. In September, China produced 13.5 billion cubic meters of natural gas, a year-on-year increase of 10.6%, an increase of 4 percentage points over the previous month. This year, unless we encounter major force majeure factors such as extreme cold current, the phenomenon of “gas shortage” is hard to reproduce.


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Industry: according to the price monitoring of the business agency, there are two kinds of commodities in the rise and fall list of bulk commodity prices in October 2019, among which one is more than 5% higher, accounting for 6.3% of the monitored commodities in the sector; the top two commodities are liquefied natural gas (70.05%) and liquefied gas (1.51%) There are 14 kinds of goods falling on a month on month basis, 4 kinds of goods falling by more than 5%, accounting for 25% of the number of goods monitored in this sector; the top three products falling are MTBE (- 15.83%), gasoline (- 11.62%), methanol (- 5.89%) This month, the average rise and fall was 0.44%.


III. future forecast


LNG analysts of business club think: in recent days, natural gas has been declining one after another, the pressure of middlemen’s sales is too high, some middlemen’s profits have been inverted, and their mentality is relatively negative. Considering the problem of loss, the decline of local liquid price slowed down. With the decrease of temperature and the approaching of central heating in the north, the demand for heating will increase, and the demand for LNG will be boosted. At that time, the market situation of LNG will change, and there is no lack of expectation for rise.

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