SunSirs: China LNG Prices Shift into "Fast-Track" Mode; Beware of Potential Pullback from Highs

I. Price Trends: Surging Nearly 10% in a Week, Breaking Annual Highs

According to the latest data from SunSirs, the benchmark price for liquefied natural gas (LNG) was quoted at 5,824.00 RMB/ton on September 1, marking a significant increase of 9.47% from the beginning of the previous month (5,320.00 RMB/ton). Recent daily price charts indicate an accelerating upward trend in the market.

On August 25, the price was hovering at a low of 5,424 RMB/ton. Subsequently, it recorded gains for five consecutive days; notably, the price jumped 3.81% on August 31 alone, decisively breaking through the 5,800 RMB/ton mark. This rapid, steep surge was primarily driven by rising upstream gas source costs; domestic LNG plants showed a strong determination to maintain higher prices, propelling spot prices upward.

II. Key Drivers and Market Outlook

Cost-Driven Dynamics: The core logic behind this rally is the rise in upstream gas source costs. Supported by these costs, LNG plants have continuously raised ex-factory prices. Downstream receiving terminals and traders have shown a willingness to follow suit, creating a positive feedback loop.

Supply-Demand Dynamics: Although prices are at annual highs, demand has not seen explosive growth; rather, the market is passively accepting the higher prices. If upstream gas costs fail to remain high, or if downstream buyers resist the high prices (leading to a situation where prices exist but trading stalls), the market may consolidate sideways at these high levels to digest the gains.

Summary: This week, the LNG market saw increases in both volume and price. From a technical perspective, the moving average system shows a perfect bullish alignment, confirming a short-term upward trend. It is advisable to closely monitor fluctuations in upstream gas source prices and the support level of the 5-day moving average; as long as the price remains above the 5-day average, the strong market momentum is likely to continue.

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