China LNG Prices Soar to New Annual Highs on Rising Costs

The price of liquefied natural gas (LNG) in China has surged by nearly 10% over the past week, breaking annual highs. According to data from SunSirs, the benchmark price for LNG was quoted at 5,824.00 RMB/ton on September 1, up 9.47% from the beginning of the previous month.

The rapid increase in prices is primarily driven by rising upstream gas source costs. Domestic LNG plants have raised ex-factory prices, and downstream receiving terminals and traders are following suit, creating a positive feedback loop.

Despite reaching annual highs, demand has not seen explosive growth. If upstream gas costs fail to remain high or if downstream buyers resist the high prices, the market may consolidate sideways at these high levels to digest the gains.