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LNG Prices Fell More Than 33% A Week, GAS SHORTAGE Blowing Big Price Bubble Broke
Jan 04, 2018

LNG prices fell more than 33% a week, "gas shortage" blowing big price bubble broke

The price bubble of liquefied natural gas (LNG), which has been blowing in the name of "gas shortage", finally burst under the joint rectification work of the Central Government and local governments. The reporter on the 3rd from the business community inquiries data found that LNG prices have been falling channel for a week in a row, from the highest of 8477.78 yuan / ton all the way down to yesterday's 5643.75 yuan / ton, down as high as 33.43%. Experts say this means that the most difficult moment of "gas shortage" in the current round or has passed.

Roller coaster liquefied natural gas prices

According to business association data, as of December 25, 2017, the LNG reference price climbed to a record high of 8477.78 yuan / ton last year, up 29.27% from 6558.33 yuan / ton as of December 1, 2017. Only a week later, the reference price was only 5643.75 yuan / ton, down more than 33% a week.

Previously, from November 15, 2017 onwards, LNG just like to get on a roller coaster, prices soaring, during which in addition to a slight decline in one or two trading days outside the almost hesitate to rise from 4239.17 yuan / ton up all the way to 8477.78 yuan / ton.

Compared with the above reference price, the market price of LNG is even more bizarre. Late last month, LNG prices in the northern region have mostly risen to 8500 yuan / ton to 9500 yuan / ton, Shandong and Jiangsu LNG ex-factory price has more than million.

Behind the skyrocketing price, there is a frequent emergency of stockpiles of natural gas all over the country. An insider told the Shanghai Securities News revealed that as long as the southern LNG shipped to the north to sell, the price can be doubled.

In an emergency, the authorities began to strike the market chaos. National Development and Reform Commission on December 4, 2017 held a liquefied natural gas price regulations and policies reminded the meeting that the LNG production and circulation enterprises and related social organizations to strengthen price self-regulation, price behavior.

At a press conference held on December 18, 2017, NDRC spokesman Meng Wei also pointed out that it is necessary to immediately carry out special supervision and inspection on the price of natural gas market, and focus on examining and disrupting market order such as fabricating and disseminating price information and resolutely investigate and deal with malicious hoardings , Driving up the price, as well as the operators to reach a monopoly agreement, abuse of market dominance and other illegal activities.

Two days later, the NDRC's Price Surveillance and Anti-Monopoly Bureau started investigations into the alleged violation of antitrust laws by 17 enterprises, including the Daqing Branch of China National Petroleum and Natural Gas Sales.

In the meantime, specific measures are also put in place for the speculation of LNG prices. On the afternoon of December 28, 2017, Yunnan Provincial Price Bureau organized some gas companies to hold a "liquefied natural gas (LNG) for the stabilization of price", announced that from now on until March 31, 2018, the price regulation of LNG will be implemented across the province Measures, fabricated, spread price information will face 50,000 yuan more than 5 million fine.

"Gas shortage" haze when dispersed?

"The price of liquefied natural gas has dropped from a high level, and in my opinion it is related to many factors." Professor Liu Yijun, a natural gas expert from China University of Petroleum, said in an interview with Shanghai Securities Daily yesterday that the most important thing is the supervision and inspection by the NDRC and the Price Bureau , Making speculation in the market speculative off some convergence, some high-priced gas ceased to exist.

In his opinion, the drop in the price of LNG still causes the market supply and demand to gradually stabilize. Originally for the sake of protecting people's livelihood, some places would not hesitate to buy high-priced gas, thus raising the overall price level. However, with the gradual increase of supply capacity, especially the supply of Central Asian gas and imported LNG once in short supply, Sexual issues have eased, supply pressure is not as big as before.

According to Yulin Coal Trading Center data, CNOOC Tianjin LNG project has now entered full capacity production status, from the previous one week to pick up and unload a vessel increased to about 3 days to pick up and unload a day for North China gas supply about 24 million cubic meters, is Twice as usual. In addition, Tianjin Bin Da gas pipeline officially put into use ventilation recently, marking the first interoperability of CNOOC and PetroChina gas supply pipe to further release the gas supply capacity in North China.

"Finally, many industrial enterprises are under pressure to complete their annual targets and production tasks by the end of 2017, have a phased approach to raw natural gas, and change the operating pace of enterprises after New Year's Eve. This part of the pressure is gone, from the demand side to Natural gas supply and demand pattern has brought important changes. "Liu Yi Jun said.

In his view, unless there is more unusual weather, this round of "gas shortage" should not occur even greater problems. "My judgment is that the most difficult time for gas to live in will be over, even after looking back two or three years. This is mainly due to the fact that many factors such as the economic recovery, the transformation of the industrial chain and changes in the market pattern are all intersecting in 2017 Overlapped, the future should not reproduce this multiple overlapping conditions. "

In fact, from a global perspective, natural gas output is still growing. It is estimated that global LNG liquefaction capacity will reach 440 million tons / year in 2020, a substantial increase of 43% over 2016. Zhang Yuqing, former deputy director of the National Energy Bureau believes that the future global oversupply of LNG will intensify, which means that the domestic natural gas resources are fully protected.