Chinese domestic prices in winter tumbled to their lowest levels in five years Dec. 17, even falling below the weak season prices this year.

As of this week to Dec 17, North China’s prices fell sharply to Yuan 3,800/metric ton, while East China saw prices slid to Yuan 3,820/ ton. This marks a new annual low and the steepest winter drop in the past five years.

According to market participants, the lowest price in the past five years in East China in winter was around Yuan 4,250/mt in 2024.

Market participants pointed to a combination of high coastal storage and an influx of cargoes as the primary reason for the collapse. Chinese coastal storage has reported a relatively high inventory, outpacing demand.

Temperatures in East and North China are forecast to be higher than average, while industrial demand has remained lackluster during winter.
At the same time, domestic production has remained robust, further exacerbating the oversupply situation.

China’s domestic natural gas output in November rose 5.7% year over year to 21.9 Bcm, data from the National Bureau of Statistics showed Dec. 15.

Industry sources said that the manufacturing sector’s recovery has been weak, with demand from real estate and other high-energy-consuming industries remaining a key drag.

West China experienced a similar decline to that of coastal regions. Earlier in the week, LNG prices in the region dipped below Yuan 3,700/mt, a direct result of persistently high inventory levels. Additionally, recent snowfall in West China has hampered transportation, causing further price pressure.

Despite a lower February JKM at $9.43/MMBtu on Dec. 17, Chinese importers have shown little interest in imports. Many attribute this reluctance to a combination of sufficient domestic supply and minimal import margins.

Platts is part of S&P Global Energy.
Source: Reuters