SunSirs: Narrow Range Consolidation of China Methanol Market

According to the Commodity Market Analysis System of SunSirs, from July 29th to August 2nd (as of 15:00), the average price of methanol in East China ports in the domestic market increased from 2,500 RMB/ton to 2,515 RMB/ton, with a price increase of 0.60% during the period, a month on month decrease of 1.76%, and a year-on-year increase of 7.40%. The domestic methanol market has undergone a narrow consolidation. Due to weak demand, there is currently no significant positive news to boost the market. The overall delivery volume in the mainland market is average, and coupled with the impact of weather factors on transportation, inventory has accumulated in the mainland. However, companies do not have any pressure to ship, and the market performance is stagnant.

As of the close on August 2nd, the closing price of methanol futures on Zhengzhou Commodity Exchange has risen. The main contract for methanol futures, 2409, opened at 2,495 RMB/ton, with a highest price of 2,516 RMB/ton and a lowest price of 2,487 RMB/ton. It closed at 2,505 RMB/ton at the end of the day, up 10 RMB/ton from the previous trading day's settlement, an increase of 0.40%. The trading volume was 491,828 lots, and the position was 626,831 lots, with a daily increase of -23,229.

In terms of cost and supply, global coal supply remains stable, while domestic imports have increased. The increase in domestic demand is insufficient to support coal prices at a high level; In terms of demand, the overall pressure on power plant inventory is relatively small, and the terminal is currently mainly supplemented by long-term agreements, replenishing inventory according to demand. The demand for coal in the market is relatively flat, and the overall sentiment is wait-and-see. The impact of methanol cost is mixed.

On the demand side, downstream MTBE: Shengtong Chemical's inventory construction plan has led to an increase in MTBE demand; Downstream formaldehyde: Shandong Lianyi and Qingzhou Hengxing formaldehyde plants have reduced their load and demand for formaldehyde; Downstream dimethyl ether: Qianjiang Jinhuarun plant shut down, resulting in reduced demand for dimethyl ether; Downstream chloride: There is a maintenance plan for the East China factory, but the load of the North China unit is still unstable, resulting in a decrease in chloride demand; Downstream acetic acid: Tianjian is undergoing maintenance, and Texas Hualu is about to shut down, resulting in a decrease in demand for acetic acid. The impact of methanol demand is mixed.

On the supply side, maintenance of middling coal Ordos, Xinjiang Xinye, Xinxiang Zhongxin, Yunnan Jiehua devices; Inner Mongolia Rongxin plant reduces production; Xidawei, Xiaoyi Pengfei, Yunnan Pioneer, Yunnan Qumei, Shandong Alliance, Jinmei Huayu, Chifeng BoRMB in Inner Mongolia, and Baofeng in Ningxia have resumed their facilities. The recovery amount exceeds the loss amount, resulting in an increase in capacity utilization rate. Negative factors affecting the methanol supply side.

In terms of external markets, as of the close of August 1st, the closing price of CFR Southeast Asia methanol market was between $345-346/ton. The closing price of the US Gulf methanol market is 101-102 cents/gallon, up 1 cent/gallon; The closing price of FOB Rotterdam methanol market is 323-324 euros/ton, down 2 euros/ton.

Early maintenance equipment will gradually resume, and supply may increase significantly; In terms of demand, downstream consumption lacks momentum, making it difficult to break the deadlock. SunSirs's methanol analyst predicts that the domestic methanol market will mainly focus on consolidation.

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