Imported LNG prices in China still showed an uptrend primarily supported by the LNG terminals refraining from selling, as well as the reduction of domestically-produced LNG supply, despite a large number of imports arriving at ports, according to OilChem.
China's 16 LNG terminals received a total of 26 cargoes or 1.76 million tonnes of LNG during the week ended December 7, an increase of 17.45% compared to last week's 1.50 million tonnes. However, the imported LNG prices increased 6.8% from prior week to Yuan 6,064.6/t, data from OilChem showed.
On the one hand, the lack of feed gas supply drove down LNG production in Northwest China and North China's Inner Mongolia, which are the main producing areas of LNG. The decrease in domestically-produced LNG supply thus supported imported LNG sales.
On the other hand, domestically-produced LNG prices increased significantly to Yuan 6,487/t on higher feed gas prices on November 30, far higher than imported LNG prices of Yuan 5,870/t on the same day. This bolstered imported LNG sales by trucks, leading to a decrease in terminals' inventory level in the early part of this week. However, considering the extreme cold weather alert in the north part of China in mid-December, the terminals were reluctant to sell goods and maintained their inventory above the medium level. As a result, imported LNG sales by trucks dropped 17.25% to 10,202 vehicles this week, from 12,328 vehicles last week.
Looking ahead, a total of 22 cargoes are expected to arrive at 9 domestic LNG terminals next week, with a volume of nearly 1.68 million tonnes. But the imported LNG supply from terminals may still be tight, as the terminals will keep the inventory at medium level on the extreme cold weather alert, which will ensure the imported LNG prices to stay at a high level next week.
China LNG Prices
Source: OilChem
Written by Sunny Fang, fss@oilchem.net
Edited by Aggie Hu, huchenying@mysteel.com