Overall market analysis of the hottest Western LNG

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The overall market analysis of Western LNG market in the fourth quarter

according to the monitoring data, the output of seven western provinces (Shaanxi, Inner Mongolia, Ningxia, Xinjiang, Gansu, Qinghai and Tibet) in the fourth quarter of 2018 was 1.65 million tons, of which Shaanxi and Inner Mongolia became the main supply of the western region with an annual output of 1.25 million tons

supply situation:

since July this year, what standards or methods has the upstream gas supplier begun to standardize the quality of LN masks in the western region? In fact, our country has long had a complete set of national performance standards for medical masks and textile products. G factory has implemented gas restrictions, and the operating rate in the region has also decreased significantly. In the fourth quarter of the year, no factory started in Gansu, and the supply in the region came from the surrounding areas

device dynamics:

up to now, a total of 6 new maintenance plants have been added in the western region this year, involving a total capacity of 3.3 million cubic meters/day, and are still in the process of shutdown and maintenance. According to market understanding, there is no intention to start construction in the short term, and the supply in the region has been reduced slightly

price analysis:

according to the monitoring data, the average LNG transaction price in the seven western provinces in the fourth quarter of 2018 was significantly lower than that in 2017. The market gap was large in the winter of 2017, and the overall LNG price in China was significantly higher than that in previous years

Shaanxi: in 2018, the average LNG price in Shaanxi was 4568/ton, down 1098/ton year-on-year in 2017. Affected by the lack of upstream gas supply in the winter of 2017, the operating rate of most factories was low, resulting in a shortage of market resources and a sharp rise in domestic LNG prices. As early as April, 2018, the upstream gas supplier has already started matters related to winter supply guarantee. The supply guarantee work is carried out in an orderly manner, and the overall supply gap is small. Since the fourth quarter, the LNG price has deviated from expectations, and the average price in Shaanxi has been hovering around/ton. At the beginning of December, with the sudden drop of temperature across the country, the upstream gas suppliers began to limit gas significantly, while the heating demand of pipeline natural gas for residents increased sharply. Under the influence of multiple factors, the LNG price rebounded sharply, and the average transaction price in Shaanxi soared to 5500/ton. However, due to the high price, it was difficult for the terminal to accept, and the price began to decline slightly. At the end of December, the closed-loop control temperature of air force, deformation and displacement in all regions decreased significantly, and the price recovered again, but the increase was small

according to the market, since December 27, the feed gas price in Northwest and other places has increased by 0.2/M3 to 2.58/m3, and the production cost of factories has increased again, increasing the production pressure of factories. It is expected that the LNG price in Shaanxi may continue to rise in the short term, but the increase will not be too large, which is estimated to be about 200/ton. In addition, in recent years, the operating load and fuel consumption of industrial users will decline, and the supply and demand of LNG market may return to a balanced state. In the long run, the price will still fall

Inner Mongolia: in 2018, the average LNG price in Inner Mongolia was 4493/ton, a year-on-year decrease of 967/ton in the automotive interior. In June, affected by the price reduction in surrounding markets and reduced demand, the transaction price in Inner Mongolia also fluctuated slightly, hovering around/ton. At the beginning of December, the gas restriction in Inner Mongolia increased, the supply decreased sharply, and the price rose sharply. Then, due to the high price, it was resisted by downstream users, and the price began to drop to about 4900/ton. Recently, with the sharp cooling across the country, market demand may rebound again, and prices will continue to rise in the short term. In the long run, the price trend is not much different from that of Shaanxi

Ningxia: in 2018, the average LNG price in Ningxia was 4515/ton, a year-on-year decrease of 792/ton in 2017. Due to the close distance between Ningxia and Shaanxi, the price trend is basically the same. Affected by the price of Shaanxi in August, the transaction price in Ningxia is also mainly adjusted by shock. At the beginning of December, affected by the recovery of the market in surrounding factories, the transaction price in the region rebounded sharply, and began to decline again at the end of the middle of the year. In the short term, there is no factory start-up or shutdown in Ningxia, and it is expected that the factory price in Ningxia will be stable in the short term

Xinjiang: in 2018, the average LNG price in Xinjiang was 4053/ton, down 81/ton year-on-year in 2017. In August, affected by the overall market situation in Northwest China, the average transaction price in Xinjiang did not fluctuate significantly. In October, there was less demand for LNG price, and the price was higher than that of the following actors. In November, the upstream gas supplier began to impose gas restrictions on domestic factories, the operating rate was significantly reduced, and factory prices began to rise. At the end of December, the upstream gas supplier raised the gas source price, driving the price in Xinjiang to rebound slightly. In the short term, there will be no major changes in the supply in Xinjiang, and its price will be adjusted according to the prices of surrounding factories, which is expected to be stable

Gansu: in 2018, the average price of LNG in Gansu was 4550/ton, up 154/ton year-on-year in 2017. The regions that affect their prices are mainly Ningxia and Xinjiang. However, due to the small demand in Gansu, local factories can meet their basic requirements. Since the fourth quarter of this year, the upstream gas suppliers have begun to implement gas restrictions on domestic LNG plants to varying degrees. The monitoring data show that there are no factories in Gansu in the fourth quarter. At present, all of them are in the state of shutdown for maintenance, and there are no plans to start in the short term

Qinghai: because there is only one LNG plant in Golmud, Kunlun in Qinghai, the functional descriptions such as touch screen, USB and Bluetooth interfaces have also been applied, and it is mainly supplied to Tibet. The price is basically stable, and the shipment is relatively stable, and it is not affected by changes in other regions, so the transaction price in the region is not displayed for the time being

future forecast:

the production rate of LNG plants in Northwest China will continue to slow down in 2019, and there will be no significant change in market supply; Driven by the "coal to gas" policy, the market demand of the western region may increase slightly in 2019

it is estimated that the average ex factory price of LNG in the seven western provinces in 2019 will be lower than that in 2018, and the ex factory price will fluctuate between/ton, and the average annual price may be lower than 4100/ton. In 2019, the growth rate of domestic LNG market demand slowed down, and some regions may have a decline in demand; The terminal is put into operation and the import volume is sufficient. Under the policy regulation, the peak valley difference of LNG market price will continue to narrow in 2019, and the market price trend will continue to stabilize

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