SunSirs: Narrow Decline in China Methanol Market

According to the Commodity Market Analysis System of SunSirs, from January 29th to February 2nd (as of 3:00 pm), the average price of methanol in the domestic methanol market in East China ports decreased by 254 RMB/ton from 2,580 RMB/ton. During the cycle, prices fell by 1.19%, with a month on month increase of 5.34% and a year-on-year decrease of 6.40%. Domestic methanol plants are gradually recovering, and production enterprises still face supply pressure, with some enterprises still having inventory demand before the holiday. Affected by rainy and snowy weather, transportation in Henan, Shanxi and other areas has been further restricted, resulting in limited shipments and a weak methanol market.

As of the close on February 2nd, the closing price of methanol futures on the Zhengzhou Commodity Exchange has fallen. The main contract of methanol futures, 2405, opened at 2,462 RMB/ton, with a highest price of 2,464 RMB/ton and a lowest price of 2,437 RMB/ton. It closed at 2,445 RMB/ton at the end of the day, a decrease of 21% or 0.85% compared to the previous trading day's settlement. The trading volume was 844,945 lots, with a position of 880,583 lots and a daily increase of -40,925.

On the cost and supply side, global coal supply remains stable, domestic imports have increased, and the increase in domestic demand is not sufficient to support coal prices at high levels; In terms of demand, the overall pressure on inventory in power plants is relatively low, and terminals replenish inventory as needed. The demand for coal in the market is relatively flat, and the overall sentiment is wait-and-see. In the short term, the chemical coal market may maintain a volatile and weak operation. The cost side of methanol is influenced by bearish factors.

On the demand side, downstream dimethyl ether: Qianjiang Jinhua Run, Lankao Huitong, and Chongqing Wanlilai are gradually driving, leading to an increase in demand for dimethyl ether; Downstream acetic acid: Sop has recovery expectations and there is currently no planned factory shutdown for maintenance, resulting in an increase in demand for acetic acid; Downstream chlorides: The storage and extraction of chemical plants in western Shandong are expected to be negative, leading to an increase in demand for chlorides; Downstream formaldehyde: The Lianyi unit has reduced its load, and the Jinyimeng and Hengxin Huiquan units are planned to shut down, resulting in a continued decrease in formaldehyde demand; Downstream MTBE: The shutdown of Zhonghao Construction has affected production, resulting in a decrease in MTBE demand. The impact of methanol demand is mixed.

Supply side, maintenance of Jinmei Huayu equipment; Inner Mongolia Rongxin and Xinjiang Zhongtai have reduced production; Sichuan Wanhua, Jiangsu Sopu, Chongqing Wanlilai, Qinghai Salt Lake, Xinjiang Zhongtai, Inner Mongolia, and Baitai facilities have been restored. The overall recovery amount exceeds the loss amount, resulting in an increase in capacity utilization. The supply side of methanol is affected by bearish factors.

In terms of external trading, as of the close on February 1st, the closing price of methanol in the CFR Southeast Asian methanol market was 347.50-348.50 US dollars per ton. The closing price of methanol in the US Gulf methanol market is 95.00-96.00 cents per gallon; The closing price of the FOB Rotterdam methanol market is 264.00-265.00 euros per ton.

In the future, it is predicted that downstream restocking is coming to an end, and businesses will gradually withdraw from the market to consume inventory, and transportation capacity will decrease as the year-end approaches. In addition, local snowfall weather affects the efficiency of resource circulation and will have a certain degree of suppression on the market. SunSirs Methanol Analysts predict that in the short term, the domestic methanol market prices will be mainly weak and consolidating.

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