SunSirs: Narrow Fluctuations in China Methanol Market

According to the Commodity Market Analysis System of SunSirs, from August 16th to 23rd (as of 15:00), the average price of methanol in East China ports in the domestic market increased from 2,411 RMB/ton to 2,461 RMB/ton, with a price increase of 2.07% during the period, a month on month decrease of 1.93%, and a year-on-year increase of 0.07%. Part of the methanol plants have been shut down unexpectedly, resulting in a narrow reduction in domestic methanol production. In addition, the large-scale olefin extraction in the northwest has led to a rebound in the domestic methanol market, but the traditional downstream market has not shown significant improvement, mainly maintaining weak operation, and the overall increase is not significant.

As of the close on August 23rd, the closing price of methanol futures on Zhengzhou Commodity Exchange has fallen. The main contract 2501 for methanol futures opened at 2,510 RMB/ton, with a highest price of 2,511 RMB/ton and a lowest price of 2,484 RMB/ton. It closed at 2,493 RMB/ton in the closing session, a decrease of 23 RMB/ton or 0.91% from the previous trading day's settlement, with a trading volume of 468,724 lots and a holding volume of 649,716 lots. The daily increase was -15,027.

In terms of cost and supply, although the intensity of high temperatures has shrunk recently, the southern region is generally hot and humid, with higher civilian electricity loads. The daily consumption of power plants is significantly higher than the same period last year, and inventory is still above a safe level. Downstream willingness to actively replenish inventory is low, and procurement behavior mainly focuses on consuming existing inventory and meeting basic needs, with scarce demand release. The impact of methanol cost is mixed.

On the demand side, downstream formaldehyde: Xin Xingcun plans to drive, and formaldehyde demand is increasing; Downstream acetic acid: Tianjian, Hualu, Sinopec Changcheng, and Yankuang are expected to recover, leading to an increase in demand for acetic acid; Downstream chloride: Fluctuations in Guangxi Jinyi plant, recovery plan for mainstream plant inventory in East China, slight increase in chloride demand; Downstream dimethyl ether: Henan Yima and Lankao Huitong dimethyl ether plants have shut down, resulting in reduced demand for dimethyl ether; Downstream MTBE: Dongfang Hongye and Jinjiang Oil and Chemical Plant have maintenance plans, resulting in reduced MTBE demand. The impact of methanol demand is mixed.

On the supply side, Guangju New Materials and Shanghai Mongolia Energy Equipment have reduced production; Shandong Mingshui, Jinfeng Wenxi, Inner Mongolia Xinao, Chongqing Kabele, Shanxi Lubao, and Northwest Energy Plant restoration. The loss exceeds the recovery, resulting in a decrease in capacity utilization. The supply of methanol is affected by favorable factors.

In terms of external markets, as of the close of August 22, the CFR Southeast Asian methanol market closed at $345.00- $346.00 per ton. The closing price of the US Gulf methanol market is 105.00-106.00 cents per gallon; The closing price of FOB Rotterdam methanol market is 336.00-337.00 euros/ton.

In the future forecast, the methanol plant will continue to operate at a relatively high level compared to the same period last year, with a large amount of port arrivals, and inventory will continue to accumulate; Traditional downstream demand still shows a slow season performance, with a significant decline in operating rates. The methanol analyst from SunSirs predicts that the domestic methanol market situation may mainly consolidate.

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