Price trend:

According to SunSirs' commodity market analysis system, from November 1st to 28th (as of 15:00), the average price of methanol at East China ports in the domestic market initially fell and then rose from 2,155 RMB/ton to 2,115 RMB/ton, representing a 1.86% decrease during the period, with a maximum fluctuation of 7.42%, and a year-on-year decrease of 22.67%.

Market Analysis

In November, the domestic methanol market generally showed a trend of initial decline followed by a rebound. The port market continued to face high inventory pressure, with the high supply situation continuously suppressing prices. Although import demand increased during this period, inventories continued to accumulate, and due to factors such as cargo backflow, market supply and demand imbalances persisted, leading to an overall downward trend in prices. Towards the end of the month, boosted by news of limited overseas natural gas supply and the subsequent shutdown of overseas plants, port inventories were expected to peak, causing port market prices to stop falling and rebound, ending the previous downward trend.

As of the close of trading on November 28th, methanol futures on the Zhengzhou Commodity Exchange closed higher. The most active methanol futures contract, 2601, opened at 2,115 RMB/ton, reached a high of 2,138 RMB/ton, a low of 2,113 RMB/ton, and closed at 2,135 RMB/ton, an increase of 18 yuan from the previous trading day's settlement price, a rise of 0.85%. Trading volume was 942,920 lots, open interest was 1,048,516 lots, and daily change in open interest was -56,142 lots.

In terms of costs, the imported thermal coal market was relatively active in November, with coal prices maintaining a stable to slightly upward trend. Market quotations were generally higher, and market sentiment improved. Imported coal prices still had a significant advantage compared to domestic coal prices, thus supporting market activity. As overseas miners closely monitored changes in the domestic market, and with increasing market support for higher prices, overseas miners' quotations remained firm. The seasonal drop in temperature led to increased restocking activity by end-users, coupled with tight supply in production areas at the end of the year, resulting in most importers having a strong positive outlook on the market, providing significant support for coal prices. These factors had a generally positive impact from methanol costs.

On the demand side, pressure from the demand end was quite significant. Prices in the downstream secondary and tertiary markets had fallen sharply recently, leading to severe profit losses in most industries, significantly restricting the purchasing enthusiasm and actual demand for methanol. The expected decrease in demand in November was particularly evident in the MTO industry, which, as a core downstream consumption sector for methanol, have a crucial impact on the market. Most downstream products were affected by methanol prices, and the demand side generally provided bearish factors for the market.

On the supply side, maintenance was underway at Jiexiu Changsheng and Xianyang Petroleum plants; production cuts were in effect at Anhui Haoyuan and Inner Mongolia Black Cat plants; and production had resumed at Zhejiang Juhua and Guotai Xinhua plants. The number of methanol plants undergoing planned maintenance or production cuts decreased, while the number of plants resuming production had increased. Therefore, the overall market supply is expected to increase. The supply side of methanol provided bearish factors for them market.

In the international market, as of the close of trading on November 28th, the CFR Southeast Asia methanol market closed at $316.5-317.5/ton. The FOB US Gulf methanol market was closed due to a public holiday; the European FOB Rotterdam methanol market closed at €259.5-260.5/ton, an increase of €4/ton.

Market Forecast:

In addition to the gradual seasonal shutdowns of some gas production facilities in Sichuan and Chongqing, close attention still needs to be paid to the impact of temperatures in Iran and the actual shutdowns of methanol projects. According to a methanol analyst at SunSirs, fluctuations in the domestic methanol spot market are expected to be limited.

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