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SunSirs: Energy, Methanol Market Continues to Decline

March 30 2020 10:24:09     SunSirs (Selena)

The domestic methanol market continued to decline. According to the price monitoring of SunSirs, the average price of domestic methanol market at the beginning of last week was 1,702 RMB/ ton, and that of domestic methanol market at the end of last week was 1,612 RMB/ ton, down 5.29% in the week, 20.27% month on month, 31.96% year-on-year.

Market Analysis

Product: methanol market continued to decline last week, and the delivery atmosphere was better. At the beginning of last week, Guanzhong fell by 200 RMB/ ton to 1,400-1,460 RMB/ ton. The profit of production enterprises shrank seriously, the bottom reading operation of downstream and traders increased, and the on-site negotiation was active. At present, the production and sales of production enterprises in each region were basically balanced last week, and the inventory was kept within the controllable range. On the supply side, Xianyang's main factory this week has a maintenance plan, which has boosted the market.

Industry chain: formaldehyde: last week, the domestic formaldehyde market fell in a narrow range. The overall operation of the market started smoothly, the upstream formaldehyde market continued to explore, the production cost of formaldehyde enterprises followed the reduction, and the theoretical profit was acceptable, but the demand of the downstream market was limited, which led to the difficulty of formaldehyde enterprises' shipment. Under this pressure, some enterprises reduced their profits and shipped at low prices.

Acetic acid: the domestic acetic acid market was light last week. After the price of the main manufacturers rose, they fell back. The overall market bearish situation is difficult to ease, and the transaction is very light.

DME: last week, the domestic price of DME continued to be low as a whole, and some regional prices rebounded slightly. International negative factors continue to spread, leading to the decline of crude oil. Mainstream manufacturers reported a rise in prices and then fell back. The overall market situation was hard to mitigate and the deal was very light. Under its influence, the momentum of last Tuesday's rise of DME was insufficient and the price was mainly low. However, the inventory of domestic gas stations is generally low, there is a certain demand for replenishment, and the market supporting behavior of enterprises leads to a slight rebound in the price of DME.

SunSirs’ view: on the positive side, the domestic methanol price continues to decline, some of the factories have fallen near the cost line and have lost money; most of the factories in the main production area have little inventory pressure, and the purchase of purchased olefins is relatively considerable. On the negative side, COVID-19 overseas triggered market concerns. The trend of international crude oil, finance and stock market was weak, and market participants were worried about it. The port demand was limited, and the arrival of inventory was stable, but the unloading speed was slow due to the tight storage capacity. After Iran's gas limit was eased, methanol production increased, and it is expected to arrive in China in late March. The world financial environment has affected the domestic economic environment, and the mentality of methanol participants has been affected. Although the price has fallen to a historical low, there is little intention to copy and speculate. At present, the financial environment and international oil price have become the main logic affecting commodities, with little impact on product fundamentals. Methanol analysts of SunSirs predict that the methanol rate will continue to decline this week.

 

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