CITIC Construction Investment: Domestic natural gas market volume increased and prices fell in November, and the short-term market is expected to show a pattern of stable supply and slow demand

The Zhitong Finance App learned that CITIC Construction Investment released a research report saying that the release of US policy dividends combined the industry's cost reduction and efficiency, highlighted dividend advantages, and boosted profits in the downstream refining business. The market's cash flow expectations for the industry are improving, and boosting sector valuations. In November, the volume and price of the domestic gas market increased and fell, and the share of imported supply increased. In November, total domestic natural gas supply increased 7.89% year on year, imports increased 10.67% and 22.21% year on month, respectively. Imports accounted for 43.33%, and domestic gas production declined slightly from month to month. The average import price fell by more than 14% year on year. It is expected that supply will ease and demand will recover moderately from December to January of the following year, and the market will show a pattern of stable supply and slow demand.

CITIC Construction Investment's main views are as follows:

Industry Overview

Judging from the performance of various transportation sub-sectors compared to the Shanghai and Shenzhen 300, the overall transportation sector rose this week (December 22 to December 26). The integrated logistics sector rose 1.30% this week, with the raw materials supply chain service sector rising 6.57%. Logistics supply chain: US energy stocks bucked the trend in 2025, and domestic gas market volume increased and fell in November.

US energy stocks bucked the trend and strengthened in 2025

In 2025, the energy market showed a rare trend in this century. International oil prices fell by more than 10% throughout the year, and WTI crude oil fell 19%, yet energy stocks bucked the trend and strengthened. The S&P 500 Energy Select Sector ETF rose by about 3% during the year, creating a divergence between oil prices and sector stock prices.

This divergence is supported by multiple core factors: (1) The introduction of relevant laws by the United States to release policy dividends such as multi-billion dollar tax relief and royalties for the petroleum industry, compounded by the Trump administration's relaxation of environmental regulations and the abolition of tax incentives for electric vehicles, which delayed the replacement recession schedule for fossil energy. (2) Leading petroleum companies continue to reduce costs, successfully reduce break-even oil prices, effectively boost earnings per share by combining stock repurchase measures, and steadily increase dividends amid industry fluctuations. The dividend yield advantage is prominent. (3) The contraction in global refining capacity has boosted the profits of downstream business of petroleum companies and further consolidated the fundamentals of performance. Investors' expectations for the industry's continued and stable cash flow in the future have improved.

The domestic natural gas market “increased volume and price fell” in November, and the share of imported supply increased significantly

In November 2025, the total monthly domestic supply of natural gas was 38.606 billion cubic meters, +7.89%; the import volume was 16.726 billion cubic meters, +10.67% year-on-year and +22.21% month-on-month, accounting for 43.33% of imports, and the share of LNG and pipeline gas imports increased sequentially. Domestic gas production was 21.88 billion cubic meters, +5.85% year over year and -1.08% month on month. The average import price was 2.08 yuan/cubic meter, -14.41% year over year. The average price of LNG and PNG both fell month-on-month, hampered by the easing of international supply. Domestic supply is expected to continue to be relaxed from December to January of the following year, domestic gas production and supply will increase steadily, the China-Russia East Line pipeline gas will be increased incrementally, and LNG imports will remain stable. The demand side is expected to recover moderately.

risk analysis

Global trade risks as the Russian-Ukrainian conflict continues to escalate; global macroeconomic recovery falls short of expectations; logistics prices are subject to changes in policy regulations; and fuel costs have risen sharply.