China's LNG Prices Soar Nearly 10%, Break Annual Highs

The price of liquefied natural gas (LNG) in China has skyrocketed 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 from 5,320.00 RMB/ton at the beginning of the previous month.

The rapid increase in prices is largely driven by rising upstream gas source costs, which have prompted domestic LNG plants to maintain higher ex-factory prices. This has created a positive feedback loop, with downstream receiving terminals and traders following suit.

While prices are at annual highs, demand has not seen explosive growth, and the market may consolidate sideways at these high levels if upstream gas costs fail to remain high or if downstream buyers resist the high prices.