SunSirs: Further Fermentation of Macro Negative Emotions towards Methanol in China

Methanol: Spot quotation, Jiangsu 2,497.5 (0), Guangdong 2,480 (-10), Lunan 2,327.5 (-22.5), Inner Mongolia 2,070 (0), CFR China main port 260.5 (1).

From a fundamental perspective, in mainland China, the domestic methanol production rate stabilized and rebounded last week. Last week, the national methanol production rate of Zhuochuang was 63.99% (1.84%), and the methanol production rate in Northwest China was 67.42% (1.57%). In terms of ports, the total inventory of Zhuochuang Port last week was 973,000 tons, a decrease of 50,000 tons from the previous period, mainly due to a shortage of port arrivals last week.

In terms of overseas operations, there have been recent changes to the equipment. Among the two sets of Malaysian oil plants, Unit 1 is undergoing maintenance and shutdown, while Unit 2 has resumed stable operation. Statoil in Norway is undergoing a 900,000 ton maintenance and shutdown, while multiple MHTL plants in Trinidad have low operating loads, with 2 of them undergoing maintenance and shutdown. The Methanex plant in Chile has low operating loads. In Iran, the Kimiya 1.65 million ton and Sabalan 1.65 million ton plants are operating stably, while the Di polymer arian 1.65 million ton plant has been restarted but the operating load is not high, and ZPC's operating load has decreased.

In terms of demand, during the traditional off-season, some units have recently started operating after the low point of MTO production. Currently, Tianjin Bohai Chemical has shut down, ZhongRMB Ethylene has reduced its load, Nanjing Chengzhi Phase 2 has shut down for maintenance of 600,000 tons, and Fude has shut down due to significant losses. Last week, Zhuochuang's external methanol to olefin production rate was 47.09% (2.66%). Recently, Zhejiang Xingxing and Shandong Hengtong have started operating, and Jiutai and Tianjin Bohai Chemical plan to start operating in August. We are closely monitoring the situation.

Overall, in terms of fundamentals, overseas facilities are gradually restarting, coastal MTO maintenance is still relatively high, and port inventory is increasing rapidly. However, the relatively strong coal prices still provide some cost support for methanol; From a macro perspective, recent US economic and employment data have fallen short of expectations, influenced by overseas recession expectations. Recently, stock markets and related commodity prices in Europe, America, and Japan have plummeted, further fueling negative macro sentiment. It is expected that methanol may maintain a weak and volatile trend under macro and fundamental pressures.

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