SunSirs: Narrow Fluctuations in China Methanol Market

According to the Commodity Market Analysis System of SunSirs, from January 5th to 12th (as of 3:00 pm), the average price of methanol in the domestic methanol market in East China ports increased by 2,415 RMB/ton from 2,409 RMB/ton. During the cycle, the price increased by 0.28%, decreased by 1.39% month on month, and decreased by 8.35% year-on-year. Supported by the shutdown of some enterprise facilities at the beginning of the week, the domestic methanol market quotation remained strong. With the improvement of market atmosphere, transactions also improved, and shipments were good. However, due to high levels of inventory in some downstream markets, the increase is relatively limited; The expected high supply in the port area and weak demand have led to a decline in the domestic methanol market.

As of the close of January 12th, the closing price of methanol futures on the Zhengzhou Commodity Exchange has risen. The main contract of methanol futures, 2405, opened at 2,340 RMB/ton, with a highest price of 2,356 RMB/ton and a lowest price of 2,319 RMB/ton. It closed at 2,343 RMB/ton, up 22% or 0.95% from the previous trading day's settlement, with a trading volume of 916,688 lots and a position of 1,062,465 lots, with a daily increase of 90,341.

In terms of cost and supply, currently, the overall temperature in various regions is higher than last year, and the demand for electric coal has declined. In the short term, the temperature in various regions has fluctuated and rebounded, and it is expected that the demand for terminal replenishment will fall. The seasonal support for coal consumption may begin to weaken, and some power plants will mainly supplement their purchases with imported coal. The demand for coal in the market will continue to be sluggish, and the coal market will remain weak in the short term. The cost side of methanol is influenced by bearish factors.

On the demand side, downstream formaldehyde: Yimeng plant operates under reduced load, Binzhou Hengyun has a parking plan, and formaldehyde demand continues to decrease; Downstream dimethyl ether: The Lankao Huitong device has been shut down, resulting in a decrease in demand for dimethyl ether; Downstream chlorides: Annual inspection of Guangxi Jinyi plant shows reduced demand for chlorides; Downstream acetic acid: Guangxi Huayi is expected to restart, and the Hengli plant is gradually recovering. The maintenance of the main plant in East China has led to an increase in demand for acetic acid; Downstream MTBE: Haite Weiye's installation has started, leading to an increase in MTBE demand. The demand for methanol is influenced by bearish factors.

On the supply side, maintenance of Yunnan Qumei, Daqing Methanol Plant, Jiangsu Sopu, and Shaanxi Weihua plants; Qinghai Salt Lake, Qitaihe Baotailong, Qitaihe Jiwei, Inner Mongolia Donghua, Jinzhou Feng'an, and Xinjiang Zhongtai facilities have reduced production; Yunnan Qumei, Sinopec Chuanwei, Xinxiang Zhongxin, Henan Shouchuang, and Inner Mongolia Yigao plant restoration. The overall loss is greater than the recovery, resulting in a decrease in capacity utilization. The supply side of methanol is influenced by favorable factors.

In terms of external trading, as of the close on January 11th, the closing price of methanol in the CFR Southeast Asian methanol market was $344.50-$345.50/ton. The closing price of methanol in the US Gulf methanol market is 93.00-94.00 cents/gallon; The closing price of the FOB Rotterdam methanol market is 270.25-271.25 euros/ton, a decrease of 14 euros/ton.

In the future market forecast, coal is operating in a volatile manner, and there is currently no support for the market in terms of costs. The supply of goods in the market is increasing, and procurement demand is relatively limited. Methanol analysts from SunSirs predict that the domestic methanol market will continue to operate weakly in the short term.

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