Sino-Singapore Jingwei Client, August 28 (Ma Jing) Since this year, global natural gas prices have continued to rise.
According to CCTV News, natural gas, which was once cheap, has recently become the leader in commodity price increases. Asia has soared six times in the past year, and Europe has soared 10 times in 14 months.
Regarding the reasons for the skyrocketing natural gas prices, Li Junfeng, executive director of the China Energy Research Society and the first director of the National Climate Change Strategy Research and International Cooperation Center, said in an interview with the Sino-Singapore Jingwei Client that there are three main aspects.
First, the global economic recovery process is relatively fast in the later period of the epidemic; second, the winter is about to enter, natural gas reserves are on the agenda, and the expansion of the demand side has promoted the rise of natural gas prices; third, recent changes in the land political situation in Afghanistan and other countries have led to instability in the international situation and the market Panic promotes hoarding.
"Of course, financial speculation is not ruled out, but it is mainly related to demand fundamentals. This is a normal phenomenon." Li Junfeng added.
Zhu Qing, chief researcher of the International Mining Research Center of the China Geological Survey of the Ministry of Natural Resources, holds a similar view.
Zhu Qing also further mentioned that, because in the fossil energy system, natural gas emits less carbon than coal and oil, the global "dual-carbon" process has raised expectations for the scale of natural gas consumption.
At the same time, global quantitative easing has led to an overall premium for bulk commodities, and therefore a premium for natural gas.
The price of natural gas in the international market has been rising all the way, which also drove the increase in the domestic market.
Sun Xuelian, senior analyst of Jinlianchuang natural gas industry, said that due to the current increase in the proportion of China's natural gas spot imports year by year, the linkage between domestic natural gas prices and international natural gas spot prices is relatively high.
Higher prices in the international market will be transmitted to the domestic market.
According to her, the highest listed price of LNG (liquefied natural gas) in the domestic market has reached 6,000 yuan per ton, and the ex-factory price in 2019 is around 3,000 yuan per ton.
"Although domestic natural gas prices are red across the board, demand is sluggish, and overall market shipments have been reduced." Sun Xuelian said that due to the current sharp increase in LNG prices in the entire natural gas market, downstream users are not able to afford it, and the sales of LNG refueling stations have fallen sharply.
Industrial users have already experienced production cuts or even shutdowns. For example, some small and medium-sized ceramic factories and other industrial users have stopped operations due to poor economic affordability, and qualified industrial users will choose alternative energy sources such as LPG (liquefied petroleum gas).
Zhu Qing emphasized that rising global natural gas prices will increase production and living costs, and production may be further transmitted downstream, reducing the profit margins of energy-consuming companies.
At the same time, it will also bring about price hike expectations for energy sources such as coal and oil that have a mutual substitution effect.
When will the "crazy rally" of natural gas stop the car?
Zhu Qing believes that in the long run, the expansion of natural gas consumption is inevitable.
In the short to medium term, it faces the expected impact of repeated epidemics and the withdrawal of quantitative easing policies.
If global economic growth fails to meet expectations and the quantitative easing policy is withdrawn, natural gas prices may adjust after growth.
He also emphasized that geopolitical factors will also bring uncertainty to natural gas price fluctuations.
Sun Xuelian predicts that the price level of natural gas should continue to remain high during the year.
The current market supply and demand are tight, and Beixi Second Line (that is, Russia's important pipeline for transporting offshore natural gas to Europe) may be put into operation later than market expectations.
If Russia cannot supply more pipeline gas to Europe this winter, Europe still needs to purchase more LNG to replenish its inventory.
This will lead to bidding for LNG purchases in Europe and Asia, which may promote higher LNG spot prices in Northeast Asia.
Li Junfeng also believes that natural gas prices will continue to rise in the short term.
"The current price is a short-term market behavior, but from a longer-term perspective, there may be an oversupply of natural gas in the future, and it is difficult to change it." He suggested that China must still insist on "walking on two legs." "The policy is to make full use of international and domestic resources, on the one hand, increase domestic development efforts, and on the other hand, diversify international supply sources to ensure national energy security.
In addition, Li Junfeng emphasized that China should expand its natural gas reserves, including strategic reserves and commercial reserves.
"Because China's current natural gas reserve capacity is too low, there is still a certain gap compared with developed countries. It is almost helpless to deal with cyclical price drops or skyrocketing. When prices are low, imports cannot be expanded, and when prices are high, they have to Import." (China-Singapore Jingwei APP)
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