Natural gas demand is weak BUT are the prices approaching buy point?
In Europe, the strike in France continues, but the upstream resource supply remains sufficient, the downstream demand continues to be weak, the market inventory turns from falling to rising, the natural gas market forms a situation of oversupply, and the market reserve gradually increases, which drives the TTF futures price down.
The temperature in the United States has risen, the domestic temperature remains appropriate, the downstream demand remains weak, the export remains stable, and the futures price of NG in the United States remains low and volatile.
Market profile
As of April 11, the futures price of natural gas (NG) in Henry Port of the United States was 2.186 US dollars/million British heat, up 0.08 US dollars/million British heat from the previous cycle (04.05), an increase of 3.8%; The futures price of Dutch natural gas (TTF) was USD 13.957/million British heat, down USD 0.919/million British heat or 6.18% from the previous cycle (04.05).
In the United States, the futures price of NG in the United States has rebounded. According to the observation of the National Weather Service, the current domestic temperature in the United States continues to rise and the temperature still maintains a comfortable temperature; On the export side, the market export supply increased slightly, but the overall change was not big, and the natural gas demand in Europe and Northeast Asia remained weak.
Technically speaking, the US Port Henry futures (NG) are in a rebound stage, and the price of the US Port Henry futures (NG) remains near US $2/million British heat. The j line has approached the high point in the day, but the MACD golden fork has just formed, and the price of the US Port Henry futures (NG) has gone up.
In Europe, the inventory in the European market has increased. According to the data of the European Natural Gas Infrastructure Association, as of April 10, the overall inventory in Europe was 629Twh, and the storage capacity share was 55.83%, up 0.21% from the previous day; The market inventory has increased, the strike in France continues, and there is no news of returning to normal at present. However, the natural gas supply in Europe remains sufficient, the downstream demand remains weak, and the trade liquidity is low, which drives the TTF price lower.
Chart 1: International natural gas market price unit: USD/million British heat
Inventory
In the week ending March 31, according to the US Energy Agency report, the US natural gas inventory was 1,830 billion cubic feet, a decrease of 23 billion cubic feet from the previous month, a decrease of 1.24%; Inventories were 4,430 cubic feet higher than the same period last year, an increase of 31.9%; It is 298 billion cubic feet higher than the five-year average, an increase of 19.5%.
In the week ending March 31, according to the data of the European Natural Gas Infrastructure Association, the European natural gas inventory was 2,208.876 billion cubic feet, a decrease of 6.256 billion cubic feet or 0.28% from the previous month; Inventories were 1,191.185 billion cubic feet higher than the same period last year, an increase of 117.05%.
As the import demand in Northeast Asia weakens, the decline rate of American inventories slows down. Affected by the large-scale strike movement in France, the regasification capacity of receiving stations is weakened, the upstream supply is reduced, and the inventory re-eating shows a downward trend.
Chart 2: International natural gas inventory trend
Analysis of supply and demand situation
Supply:
This week (04.05-04.11), the survey data of the operating rate of 228 LNG plants in China showed that the actual output was 649.57 million cubic meters, and the operating rate on Wednesday was 58.3%, down 2.2 percentage points from last week. On Wednesday, the operating rate of effective production capacity was 61.52%, down 2.31 percentage points from last week. The number of newly added shutdown and maintenance factories is 5, with a total production capacity of 4.4 million m3/day; The number of newly added resumption factories is 0, and the total production capacity is 0 million m3/day. (Remarks: Stop production for more than 2 years is defined as idle capacity; Effective production capacity refers to LNG production capacity after eliminating idle capacity. The total domestic LNG production capacity is 155.35 million m3/day, with 28 long-term shutdowns, idle production capacity of 7.29 million m3/day and effective production capacity of 148.06 million m3/day.)
In terms of marine liquid, this cycle, 13 domestic receiving stations received 20 LNG carriers, and the number of receiving ships increased by 7 compared with last week, with the arrival volume of 1,299,200 tons, up 53.17% from last week's 848,200 tons. The main import sources in this cycle are Qatar, Australia and Malaysia, with arrivals of 401,500 tons, 294,200 tons and 107,800 tons respectively. In terms of receiving stations, CNOOC Dapeng received 3 ships, PetroChina Rudong, Sinopec Tianjin and Sinopec Dongjiakou each received 2 ships, and other receiving stations each received 1 ship.
Requirements:
This week (04.05-04.11), the total domestic LNG demand was 668,000 tons, an increase of 7,500 tons or 1.14% compared with last week (03.29-04.04). The total shipment volume of domestic factories was 448,000 tons, an increase of 25,100 tons or 5.94% compared with last week (03.29-04.04). The increasing market demand has led to an increase in shipments of low-priced resources.
In terms of marine liquid, the total batch shipment of domestic receiving stations was 10,477 vehicles, down 7.38% from 11,312 vehicles last week (03.29-04.04). The overall price of receiving stations was higher, the shipment was blocked, and the batch shipment declined.
Research on market mentality
Domestic mainstream view 1:After the price increase, the downstream receiving mood is not good, the market supply is sufficient, and the market outlook price may be stable and declining.
Domestic mainstream view 2:This week, some urban fuel replenishment warehouses support the market, but it is expected that the situation of large-scale replenishment warehouses is limited, which makes it difficult to generate long-term support for demand.
International mainstream views:Prices in various places have dropped to a low level, and it is expected that prices will fluctuate and adjust.
Chart 4: Investigation on the mentality of LNG industry next week
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Great ariticle, would you like to share it?