Methanol market review: in January, the situation of domestic epidemic prevention and control was again severe, the domestic trade capacity of methanol was affected, the production areas were not well arranged, the cost side coal price was loose, the cost support was weakened, and the price of main production areas moved down significantly. Near the Spring Festival, although the traditional downstream construction declined, the willingness of downstream replenishment weakened, and the market transaction atmosphere tended to be light, under the background of import shrinkage, the port still maintained the trend of destocking, and the price decline in the consumption area was significantly lower than that in the production area.

To be specific, in January, the price of upstream raw coal fell sharply, the cost side support weakened, and the prevention and control of epidemic situation intensified, which led to the shortage of methanol logistics and the increase of freight. In addition, there was the pressure of warehouse discharge before the Spring Festival holiday, and the methanol price in the main production areas gradually decreased. Under this influence, the main contract MA2105 of methanol futures also fell.

In January, the methanol plant ran smoothly. As of January 29, the average start-up load of domestic methanol plant was 70.13%, down 1.08% from December. This month, the new methanol production capacity is about 3.6 million tons, and the market also has the expectation of putting into production in the later stage. If there is no maintenance plan for the existing operating units in the later stage, the supply pressure of methanol in the later stage will increase. However, it should be noted that the profit of methanol production unit is declining again.

Affected by the Spring Festival and the epidemic situation, some enterprises in the main production areas took the initiative to go to the warehouse, and some new olefins were purchased stably, which led to the overall circulation of goods relatively stable. In January, the inventory of methanol enterprises showed a low operating situation, and the port also decreased due to the centralized delivery of goods downstream. For the coming February, the number of ships arriving in China from other regions of the Middle East will be significantly reduced, and the import pressure will be reduced due to the expansion of the internal and external price gap. It is estimated that the methanol import volume will be reduced to 810,000-830,000 tons in February, and the port inventory will continue to be depleted.

With the arrival of the Spring Festival, some factories in the lower reaches of methanol will have holidays ahead of schedule, the demand for methanol will weaken, and the consumption of methanol is expected to fall in February.

During the Spring Festival holiday in February, affected by public health events, the recovery time of terminal demand after the Spring Festival is uncertain, and the pre-sale situation in coastal areas is not optimistic. However, from February to March, foreign overhaul units are still relatively concentrated, but new units are still put into production in China in the first quarter, and it is expected that the internal and external supply differentiation will be serious.

In general, the supply and demand are weak, and the methanol market may continue to be weak in February. We need to pay attention to the progress of Methanol logistics and downstream demand recovery after the Spring Festival in China.

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