Sinopec Economics: Cost support combined with regional supply tightening leads to higher prices in the domestic LNG market

As of April 23, this week’s nationwide average transaction price for LNG at the point of departure was 5,293.95 yuan/ton, an increase of 185 yuan/ton from the previous period, a rise of 3.62%. Cost support combined with regional supply tightening has led to rising domestic LNG market prices. Regarding liquefaction plants, after last week’s raw material gas bidding ended, high prices and low volumes continued to support upstream price support mentality; during the later part of the week, some liquefaction plants temporarily suspended exports after processing, coupled with the impact of some wellhead gas sources and plant maintenance, resulting in an overall tightening of domestic LNG supply. On the receiving terminal side, the number of ships scheduled to arrive is relatively tight, inventory is controllable, and some offshore gas resources’ prices have risen in line with surrounding domestic gas prices. Looking ahead to next week, weak supply will stimulate upstream price support mentality, and there may still be room for LNG prices to rise. Due to factors such as insufficient gas sources, domestic LNG production is likely to remain difficult to increase, and the market is entering a supply-demand tight balance. The situation of small shipment pressure and low liquid levels may continue to stimulate inland liquefied source price increases. It is expected that next week’s LNG prices may further rise, with the regional weekly average transaction price possibly reaching 5,444.84 yuan/ton, and the daily price range likely between 5,350 and 5,540 yuan/ton. Industry participants should continue to monitor the bidding situation for raw material gas at Sinopec’s direct supply LNG plants in the first half of May. (Zhuochuang Information)