SourceRainbowtroutCMEGroup of Zhi Merchants Institute
Key data trend
Upstream sales at reduced prices and reduced profits
Stable trade flow and low freight
Downstream on-demand procurement, stable demand
I. Weekly summary of the international natural gas market
Market profile
As of May 21, the settlement price of Natural Gas (NG) futures in Port Henry is 2.Rainbowtrout.671 US dollars / million British heat, month-on-month compared with the previous cycle (05Rainbowtrout.14) increased by US $0.327 / million British heat, or 13.95%; Dutch natural gas (TTF) futures price was US $10.445 / million British heat, up US $1.054 / million British heat from the previous cycle (05.14), or 11.23%.
In the United States, NG futures prices showed an upward trend this week, with Liquefaction production Line No. 2 in Freeport on the 16th and recovered on the 17th; the temperature in the United States is gradually rising, and the demand for refrigeration and power generation in the region will continue to increase; the import demand for LNG in Europe is increasing, driving prices up. Technical point of view, the United States Port Henry futures (NG) for the high downward trend, the United States Port Henry futures (NG) prices to $2.60 / million British hot near, KDJ high dead fork, MACD hyperbolic high space narrowed, the United States Port Henry futures (NG) prices showed a shock upward trend this week.
In Europe, inventories in the European market remain high. According to data from the European Natural Gas Infrastructure Association, as of May 20, the overall inventory in Europe was 764wh, with a storage share of 67.39%, an increase of 0.25% over the previous day, and adequate inventories in the European market. In the European market, many Norwegian natural gas facilities, such as trolls, Casto and Devarin, are scheduled for maintenance in the coming days, with increased potential demand for imports of LNG resources outside the region, the market remains cautious about any extended supply concerns and prices are expected to see a hot heat wave in Europe.
In terms of spot prices, the spot price of natural gas in Port Henry in the United States is expected to be 2.5 US dollars / million British heat, an increase of 0.36 US dollars / million British heat from the previous month (05.14), an increase of 16.82%. The spot price of Canadian natural gas (AECO) was $0.948 per million British heat, up 0.1 percentage point, or 11.82 per cent, from 05.14.
The spot price of the main place of consumption showed an upward trend. The spot price of China (DES) arrived in Hong Kong in Northeast Asia was US $11.119 / million British heat, an increase of US $0.557 / million British heat from the previous month, an increase of 5.27%. The spot price of TTF was US $10.442 / million British thermal, an increase of US $1.271 / million British thermal, or 13.86%.
The overall supply of the market remains adequate, with the increase in temperature, the overall demand for power generation and refrigeration in the main consumer areas is gradually increasing, and the future pipeline gas supply in Europe will be affected by maintenance, driving up prices.
Figure 1: international natural gas market price unit: us dollar / million British heat
Inventory
Inventory reserves in the United States and Europe have risen steadily this week, there will be a high temperature warning in the Northeast next week, summer demand will show, and inventory growth is likely to decline.
In the week ended May 10, according to the US Energy Administration, natural gas stocks in the United States were 2.633 trillion cubic feet, an increase of 70 billion cubic feet, or 2.73 percent, from a month earlier; inventories were 421 billion cubic feet, or 19.0 percent, higher than the same period last year. It is 620 billion cubic feet higher than the five-year historical average, or 30.8%.
According to the European Association for Natural Gas Infrastructure, European natural gas inventories were 2.5795 trillion cubic feet, up 57.3 billion cubic feet, or 2.27 percent, from the previous week, and 92 billion cubic feet, or 3.28 percent, higher than the same period last year.
Chart 2: trend of international natural gas inventory
II. A weekly summary of China's LNG market
Market profile
Prices in the domestic natural gas market vary this week. On the supply side, domestic liquid plant resources are sold at high prices, while receiving stations are affected by rising international spot prices, and the price gap between the two has narrowed somewhat; on the demand side, downstream demand is relatively stable, and terminal high prices resist.
As of May 22, the price of LNG receiving terminal was 4340 yuan / ton, up 2.2% from last week (05.15), up 0.35% from last week; the price of main origin was 4288 yuan / ton, down 2.3% from last week (05.15), up 12.52% from last week; the national average price of receiving goods was 4487 yuan / ton, down 0.44% from last week, and up 6.43% over the same period last year.
As of May 21, the total inventory of domestic LNG factories on that day was 359600 tons, up 4.32 percent from last week. Liquid plant resources early price-raising sales, high-price shipments are not smooth, later price reduction shipments, the pressure has been alleviated, the market resumes the increase of liquid plants, leading to an increase in inventory.
Chart 3: domestic LNG price trend chart
Analysis of supply and demand situation
Supply:
According to the survey data on the operating rate of 250 domestic LNG factories this week, the actual output is 706.52 million square meters, with an operating rate of 56.2% on Wednesday, up 1.3 percentage points from last week. The operating rate of effective capacity on Wednesday was 58.21%, up 0.97 percentage points from last week. The number of new downtime and overhaul factories is 0, with a total capacity of 10 million square meters per day, and the number of new production resumption plants is 3, with a total capacity of 1.6 million square meters per day. (note: the suspension of production for more than 2 years is defined as idle capacity; effective capacity refers to the LNG capacity excluding idle capacity. Domestic LNG total production capacity is 177.25 million square meters per day, long-term shutdown is 28, idle capacity is 7.29 million square meters per day, effective capacity is 169.96 million square meters per day. )
In terms of sea liquid, a total of 17 LNG carriers were received by 12 domestic receiving stations this cycle, with an increase of 3 ships over last week, with an arrival volume of 1.112 million tons, a decrease of 4.58 per cent compared with last week's 1.1654 million tons. In this cycle, the main import sources are Australia, Russia and Qatar, which are 632700 tons, 192500 tons and 83100 tons respectively. From the point of view of the receiving stations, Sinopec Dongjiakou, CNOOC Zhuhai, Beihai, CNOOC Dapeng, CNOOC Binhai each receive 2 ships, and the other receiving stations each receive 1 ship.
Demand:
The total domestic demand for LNG this week (05.15-05.21) was 847500 tons, a decrease of 8900 tons or 1.04% compared with last week (05.08-05.14). In terms of sea liquid, the total volume of tank shipments at domestic receiving stations was 18511 vehicles, down 2.24% from 18935 vehicles last week, while domestic factory shipments totaled 458800 tons, unchanged from last week.
The shipments of domestic and sea liquid resources are relatively stable, the market supply and demand is balanced, and the upstream shipment is stable.
Market mentality investigation
Domestic mainstream view 1: higher international spot prices and maintenance in Central Asia and other supply-side positive factors boost the domestic market, prices may be able to support the market next week.
Domestic mainstream view 2: Recently, imported LNG has a trend of rising prices, and domestic LNG may be likely to follow suit in the later period. Prices will be dominated by strong fluctuations next week.
International mainstream view: High summer temperatures are about to sweep across the northern hemisphere, and there are maintenance or maintenance plans for LNG export terminals and natural gas pipelines. It is expected that market prices will rise and fall back in the future.
Chart 4: LNG industry mentality survey next week
3. Trend forecast for next week
Domestic price forecast
Domestic prices will operate at a high level. Due to the support of international spot prices, sea liquid shipping prices may continue to rise, and domestic LNG resource prices will form positive support. It is expected that market prices will operate at a high level in the future.
Chart 5: Domestic LNG price forecast for next week
International price forecast
Market prices in Northeast Asia will show a trend of rising and then falling. Market procurement activities in Northeast Asia will remain deserted, but high temperatures are attacking and demand for power generation and cooling in South Asia will gradually increase. Spot prices may rise due to demand. However, due to excessive prices, spot prices may rise and then fall back.
TTF futures prices will show a volatile upward trend. Currently, inventories in Europe are still suitable, and the rebound in European refrigeration demand has affected prices.rainbowtroutThanks to support, Germany and the Nordic countries will usher in abnormally high temperatures next week. As geopolitical tensions rise, traders are also wary of potential supply disruptions and expect TTF prices to show a volatile upward trend in the short term.
U.S. natural gas futures prices (NG) will show a high and stable trend, European LNG import demand will gradually increase, and domestic temperatures in the United States will gradually rise, all of which will provide positive support for natural gas prices. U.S. natural gas futures prices (NG) are expected to show a high and stable trend.
Chart 6: International futures LNG price forecast for next week