Cold weather since November had stimulated gas demand, and LNG imports into South China's Guangdong coastal terminals increased significantly. However, higher imported LNG prices had depressed purchase interest, and downstream users would rather buy more domestic LNG, according to OilChem's survey.
Guangdong imported 1.65 million tonnes of LNG in November, up 17.85% from prior month, while LNG sales by truck at coastal terminals slumped 53.14% month on month to 129 million cubic meters, down 78.24% year on year, data from OilChem showed.
The decrease was attributed to weak demand on account of higher imported LPG price in Guangdong coupled with plunging domestic LNG price in surrounding market.
Imported LNG ex-terminal price of South China's CNOOC Zhuhai Jinwan LNG terminal averaged Yuan 7,106.82/t in November, while domestic LNG Exw price of North China's Huagang Group Shanxi Gas was just Yuan 4,870/t in November, OilChem's data showed.
As a result of higher price inside the province, some buyers began to choose low-priced domestic LNG flowing from surrounding areas, causing LNG consumption in Guangdong drop 31.30% month on month to 201 million cubic meters in November, according to OilChem.
However, with further decline of temperature in northern China, domestic LNG price gained a strong upward momentum in December, as some LNG plants had curbed or suspended production to ensure the supply of natural gas for winter heating, especially PetroChina raised auction price of natural gas for December delivery.
Imported LNG price in Guangdong was nearly the same as or even far lower than domestic LNG price in surrounding areas, and OilChem expects LNG sales volumes by truck in Guangdong will definitely climb up in December.
Written by Sunny Fang, fss@oilchem.net
Edited by Navy Liu, navy@oilchem.net
