Price trend:

According to the commodity market analysis system of SunSirs, from October 1st to 31st (as of 15:00), the average price of methanol at East China ports in China fell from 2,237 RMB/ton to 2,215 RMB/ton, a decrease of 3.69% during the period, with a maximum fluctuation of 7.27%, and a year-on-year decrease of 13.28%.

Market Analysis

The port methanol market was pressured by high supply, resulting in a generally weak and volatile trend. Towards the end of the month, while foreign vessel unloading remained below expectations, takeover volumes significantly decreased, leading to a narrow accumulation of inventory. High market liquidity and weak downstream purchasing intentions further weakened prices. The inland methanol market initially rose but then declined, with weakening supply and demand factors constraining willingness to hold inventory, and the overall weak trend remained fundamentally unchanged.

As of the close of trading on October 31, methanol futures prices on the Zhengzhou Commodity Exchange fell. The most active methanol futures contract, 2601, opened at 2,202 RMB/ton, reached a high of 2,219 RMB/ton, a low of 2,172 RMB/ton, and closed at 2,180 RMB/ton, down 53 RMB/ton or 2.37% from the previous trading day's settlement price. Trading volume was 826,939 lots, and open interest was 1,350,958 lots, an increase of 29,995 lots for the day.

On the cost side, with the supply and demand structure improving in stages, rising coal prices have put increasing cost pressure on methanol, leading to a rapid and significant squeeze on the profits of coal-based methanol. The cost factors for methanol are generally favorable.

On the demand side, pressure was significant. Recent price declines in downstream secondary and tertiary markets had led to severe profit losses for many industries, significantly constraining methanol purchasing enthusiasm and actual demand. The anticipated reduction in demand in November will be primarily reflected in the MTO (methanol-to-olefins) industry. As a core downstream consumption sector for methanol, the contraction in demand in this area has a particularly crucial impact on the market. With most downstream products affected by methanol prices, the demand side for methanol generally negative for the market.

On the supply side, Xindongheng and Guangju New Materials plants underwent maintenance; Sinopec Great Wall plant reduced production; and Shanxi Coking and Jinmei Huayu plants resumed operations. Overall, the losses exceeded the recoveries, resulting in a decline in capacity utilization. The methanol supply side provided favorable factors for the market.

On the international market, as of the close of trading on October 30, the CFR Southeast Asia methanol market closed at $323.5-324.5/ton. The FOB US Gulf Coast methanol market closed at 88.5-89.5 88.5-89.5 cents per gallon; and the European FOB Rotterdam methanol market closed at €266.5-267.5/ton.

Market outlook

Some methanol projects that underwent maintenance will gradually resume operations, and domestic supply will remain ample; coastal areas still need to closely monitor supply-side fluctuations to reduce inventory. According to analysts at SunSirs, the domestic methanol spot market is expected to be weaklyconsolidated.

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