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SunSirs: Energy, Methanol Market Rose Strongly (January 6-10)

January 14 2020 17:10:21     SunSirs (Selena)

1  Price Trend

According to the price monitoring of SunSirs, the domestic methanol market last week rose strongly. At the beginning of the week, the average price of domestic methanol market was 2,097 RMB/ ton, and at the end of the week, it was 2,207 RMB/ ton, up 5.24% in the week, 3.88% on a month on month basis, down 3.52% on a year-on-year basis.

2  Market Analysis

Product: the methanol market in the mainland was generally higher last week. Under the background of terminal stock before the festival and low factory inventory in the main production area, the trading atmosphere of last week was obviously better. In addition, due to the snow weather, the highway was closed, and the regional trend was prominent, but the overall trend was strong. Last week's methanol port inventory decreased, with a total inventory of 854,600 tons in East and South China, down 36,300 tons from the previous week. Due to weather factors, the port closure in Jiangsu province led to slow unloading and relatively stable cargo preparation and pick-up in the downstream before the Spring festival, which was the main factor for the reduction of social inventory of the port.

Industry chain: formaldehyde: last week, the domestic formaldehyde market was partially reorganized and operated. Affected by the continuous increase of methanol market in the upstream, formaldehyde enterprises in some regions raised their offer, and the production cost continued to increase. However, the start-up level in the downstream market was low, the overall demand was weak, and the pressure of formaldehyde enterprises' shipment and inventory was increased, so the production cost could not be transferred to the downstream market, which led to the start-up of formaldehyde Market in this week being low, and some of them were in a loss state.

Acetic acid: the domestic acetic acid market rose slightly last week, the social inventory of the acetic acid market was gradually digested, and the downstream industries started to operate stably, and the demand for acetic acid was stable. However, the substantial demand of the South China market turned weak, and the local government maintained the balance of supply and demand and stable prices. Due to the weather, the transportation in the northwest was not smooth, and the supplier's inventory accumulated, and the passive price was mainly stable. Near the end of last week, the market recovered stable after a small rise, and the short-term downstream substantial demand was mainly stable. Although the supply of acetic acid market was tight, it could still be supplied, and the market continued to be stable gradually.

DME: the price of DME will enter a stable period after a wide rise in the near future. The high price of terminal LPG leads to poor terminal receiving mentality. Even though the price is temporarily stable, the enterprise's shipment is flat, and the enterprise's current terminal inventory is above the middle level. In terms of transportation, Shanxi and other places have begun to resume transportation. Due to the increase of market supply, the price of DME is expected to be stable at the beginning of this week.

3  Market Forecast

From the perspective of business community: good news, the procurement volume of olefins in Northwest China is quite considerable, with stable long-term implementation, and the inventory of most manufacturers in Northwest China is not high; in January, the maintenance of international methanol plant is centralized, and the estimated arrival of imported methanol is about 900,000 tons; the social inventory of methanol in port continues to decrease, and the downstream is still expected to be stocked. In terms of bad news, southwest natural gas to methanol plant is expected to restart in the middle and late of January; the output of new methanol plant in Northwest will be released; some olefin plants in port, northwest and Shandong will issue the first quarter maintenance plan; environmental protection monitoring and the impact of low temperature in winter, plate plants in Hebei, Shandong, southwest and other places have been shut down, half a month ahead of the previous year, formaldehyde demand is significantly reduced. In terms of the mainland, with the support of MTO raw material outsourcing enterprises in the northwest, the pressure on the overall inventory arrangement of the methanol plant in the northwest is not great before the Spring festival this year, and some enterprises have good pre-sale. However, the progress of goods preparation in the mainland market before the Spring Festival is different, and this week will be the supplementary stage of goods preparation before the festival. The methanol analyst of SunSirs predicted that the short-term domestic methanol market is likely to present a regional market. At present, the arrival of imported methanol ships is not concentrated, and the downstream delivery speed is acceptable, the social inventory will continue to reduce, which is favorable for the port market trend.


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