In 2019, the domestic methanol market fluctuated frequently. According to the monitoring data of SunSirs, the average market price at the beginning of the year was 2,188 RMB/ ton. As of December 23, the average market price of methanol in China was 2,090 RMB/ ton, down 4.48% in the year. The highest price in the year is 2,572 RMB/ ton on March 11, and the lowest price in the year is 1,970 RMB/ ton on July 31, with a maximum amplitude of 23.41%.
The methanol market in 2019 can be described as "mixed sorrow and happiness". According to the monitoring data of SunSirs, the domestic methanol market price has two significant increases, the first time was in the first season, with an increase of 16.91% from February 12 (2,200 RMB/ ton) to March 12 (2,572 RMB/ ton). The second time was at the end of the third season and the beginning of the fourth season. From September 1 (1,994 RMB/ ton) to October 11 (2,392 RMB/ ton), the increase was 19.96%. A big price "dive" occurred in the middle of the second season, and the price continued to fall for a long time, from May 23 (2,342 RMB/ ton) to July 31 (1,970 RMB/ ton), down 15.88%.
First Season
In the first season of 2019, the market trend of methanol shows a "M" curve trend. According to the monitoring data of SunSirs, on January 1, 2019, the average price of domestic methanol market was 2,188 RMB/ ton, on March 31, 2019, the average price of domestic methanol market was 2,378 RMB/ ton, and the overall increase of methanol market price in the first quarter was 8.68%. The main reasons for the better price trend were as follows: the higher international crude oil price, the increase of olefin purchase, the maintenance of methanol plant and other aspects, and the higher ethylene price, the prominent cost advantage of coal to methanol to olefin, and the good news of peripheral and methanol dominated the market.
Second Season
The domestic methanol market in the second season of 2019 showed a weak trend. According to the monitoring data of SunSirs, the average price of the domestic methanol market on April 1, 2019 was 2,380 RMB/ ton, and the average price of the domestic methanol market on June 30, 2019 was 2,180 RMB/ ton, with a decline of 8.40% in the second quarter. The main reason for the decline of methanol market in April was that the maintenance devices are restored in spring and the domestic methanol supply was restored; the international methanol production enterprises operated smoothly, the imported goods arrived at the port, and the social inventory was significantly increased; affected by safety, environmental inspection and other factors, the local market demand was limited, which seriously affected the downstream production enterprises' methanol consumption. In the first ten days of May, the domestic methanol market improved, most enterprises in the mainland had low inventory, relatively ideal pre-sale, and little sales pressure; from June to July, some methanol plants were still planned to be overhauled, with more overhauls, showing a positive trend in terms of supply. However, the good situation was not long. With the abundant domestic supply of methanol and the increase of imported goods, the market supply was at a high level; the downstream demand was obviously reduced, and the methanol market ended in a "downturn" situation.
Third Season
The market trend of methanol in the third season of 2019 presents a "W" curve trend. According to the monitoring data of SunSirs, the average price of domestic methanol market on July 1, 2019 was 2,178 RMB/ ton, and the average price of domestic methanol market on September 30, 2019 was 2,310 RMB/ ton, with an increase of 6.06% in the second quarter. In July, the overall operation of domestic methanol remained at a high level. In August, the import was estimated to be around 850,000 tons, and the market supply was abundant. The safety and environmental protection inspection continued to be severe, and the affected downstream terminal enterprises might reduce production or stop, which was not conducive to methanol consumption. Some domestic MTO enterprises that need to purchase methanol had maintenance plans, which greatly reduced the demand for methanol. In August, the methanol market rose first and then fell. The new methanol to olefin unit was put into operation one after another, and the early maintenance olefin unit returned to normal one after another. The methanol market rose slightly. However, with the approaching of the national day, the northern environmental protection supervision was strengthened, the downstream construction was limited, the procurement was gradually reduced, and the methanol market fell again. In September, due to the influence of goods preparation before the National Day holiday, the methanol inventory in the mainland and ports showed a downward trend. The mainland was mainly affected by the increase in olefin procurement, while the goods from Iran arrived in China decreased. Therefore, the fundamentals released favorable results, and the methanol market rose again.
Fourth Season
In the fourth season of 2019, the domestic methanol market was showing a weak trend. According to the monitoring data of SunSirs, the average market price of domestic methanol on October 1, 2019 was 2,310 RMB/ ton, and the average market price of domestic methanol as of December 24, 2019 was 2,062 RMB/ ton, with a decline of 10.71% in the fourth season. The main reasons for the decline were as follows: the price of methanol in US dollars and Taicang in RMB was in line with each other, the imported goods flowed into the mainland market by virtue of cost advantage; the domestic methanol futures fell sharply, which affected the market mentality; at present, environmental protection regulations around the country, the downstream market might start to fall. At the same time, the rising freight affected the market's enthusiasm for transaction. Moreover, the port market continued to be low, which continued to restrain the formation of the mainland market. In addition, the downstream markets were subject to environmental protection control, and the construction starts were expected to decline. The overall demand side was low, and the methanol market was in a downturn.
Generally speaking, in 2020, in the short term, the situation of methanol industry oversupply will continue, and the new capacity of methanol is far higher than the new demand in the downstream, so the pattern of oversupply will be further intensified. Affected by environmental protection policies, the operating rate of traditional downstream enterprises such as dimethyl ether and formaldehyde is affected, and the demand for methanol is difficult to guarantee. In the medium and long term, methanol market will still be dominated by downturn.
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