According to the Commodity Market Analysis System of SunSirs, the domestic methanol market fluctuated and declined from January to June 2023. From January 1st to June 30th, the average price of the East China Port (Taicang cash in exchange) in the domestic methanol market dropped from 2,698 RMB/ton to 2,180 RMB/ton. The price fell by 19.21% during the cycle, with the highest price appearing at the end of January at 2,807 RMB/ton and the lowest price appearing in mid June at 2,015 RMB/ton, with a maximum amplitude of 28.20%. The price fell by 15.83% year-on-year in the middle of the year.
The trend of the domestic methanol market in the first half of 2023 can be roughly divided into three stages: the first stage is the consolidation of fluctuations from the beginning of the year to late February; The second stage, from late February to mid June, saw a broad decline; In the third stage, there was a slight recovery from mid June to the end of June.
On the cost side, the continuous loosening of coal prices in the first half of 2023 has led to a weakening of methanol cost support, and the bearish cost side has led to a continuous decline in methanol prices. According to data from the National Bureau of Statistics, from January to May 2023, China produced 1.91 billion tons of raw coal, a year-on-year increase of 4.8%; At the same time, the coal inventory at the port remains at a historical high level, with a significant increase in the quantity of imported coal. However, the demand performance is weak, there is insufficient follow-up, and the demand for coal is limited. The sluggish coal market is negative for the methanol industry chain in terms of cost.
On the supply side, as of the end of 2022, the domestic methanol production capacity has reached 104.7 million tons, and the production capacity investment has gradually slowed down. In the first half of 2023, seven units were put into operation, with a total new production capacity of 4.55 million tons. Due to the long commissioning and operation cycle of some units, the actual start-up time is relatively short, and the contribution to production is relatively low. From January to June, the overall operating rate of domestic methanol plants remained at around 70%, with widespread losses in the methanol industry and average production enthusiasm among enterprises. Coupled with frequent maintenance, the actual utilization rate of plants in the first half of the year was slightly lower than the same period last year, and production also decreased. The domestic production from January to June was 37.62 million tons, a decrease of 1.90% compared to the same period last year.
Import and export, from January to May 2023, China's cumulative methanol import volume was 5.3373 million tons, a year-on-year increase of 8.11%, and the cumulative export volume was 33,600 tons, a year-on-year decrease of 57.89%. The import volume significantly increased in the first half of 2023. On the one hand, the enthusiasm for starting production in European and American regions is generally high, while demand performance is weak. The flow of methanol into the European and American regions in South America and the Middle East has decreased, while the flow of goods into China has significantly increased; On the other hand, the amount of methanol flowing into China from a certain European country has also increased. It is expected that the import volume will reach 1.4 million tons in June, which will increase the short-term import pressure and put pressure on the port to accumulate inventory. With the slowdown in overseas demand and the production of new devices, domestic imports will remain at a high level in the second half of the year. High imports will have a certain degree of suppression on port spot prices, thereby affecting spot prices.
On the demand side, in 2023, methanol and downstream production were relatively staggered. In the first half of the year, methanol units were mainly put into operation, with fewer downstream units being put into operation; In the second half of the year, two large units of downstream MTO will be put into operation, units with formaldehyde exceeding 2 million tons will be put into operation, and units with acetic acid exceeding 1.2 million tons will be put into operation. Only a few small units of methanol will be put into operation. In the first half of the year, methanol supply was relatively loose, while downstream demand was relatively weak. The supply and demand situation is expected to improve in the second half of the year. At the same time, among downstream products, due to the relatively strong energy and refined oil, while methanol continues to decline, industry enterprises such as MTBE have maintained high profits, high plant operating rates, and the product market can maintain a high level of prosperity, which is expected to stimulate the methanol market trend in demand. At the same time, the dependence on methanol exports is relatively low, and the increase in exports in the second half of the year is limited. The overall demand for methanol in the second half of the year has recovered, and the price situation is expected to recover and operate.
In the future, methanol price fluctuations have certain seasonal characteristics, specifically manifested as concentrated spring maintenance in the downstream from March to May, with a high probability of price decline. The "Golden Nine Silver Ten" is a traditional peak season for consumption, with a high probability of price increase. Boosted by the continuous recovery of the domestic economy and the traditional "Golden Nine Silver Ten" consumption peak season, methanol demand may rebound in the second half of the year. But considering the limited increase in demand, or to some extent suppressing the upward space. SunSirs ethanol analysts predict that the domestic methanol market is expected to fluctuate and rise in the second half of the year.
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