SunSirs: Narrow Range Consolidation of China Methanol Market Situation

According to the Commodity Market Analysis System of SunSirs, from February 18th to 23rd (as of 3:00 pm), the average price of methanol at East China ports in the domestic market decreased by 2,647 RMB/ton from 2,700 RMB/ton. During the cycle, prices fell by 1.94%, with a month on month increase of 4.03% and a year-on-year decrease of 4.16%. The recovery of downstream demand after the holiday is relatively slow, and the downstream replenishment sentiment is relatively average. In addition, due to the influence of rain and snow weather, some enterprises have limited shipments. The overall transaction volume of the domestic methanol market is average, and the price is mainly weak.

As of the close on February 23, the closing price of methanol futures on the Zhengzhou Commodity Exchange has risen. The main contract of methanol futures, 2405, opened at 2,506 RMB/ton, with a highest price of 2,529 RMB/ton and a lowest price of 2,502 RMB/ton. It closed at 2,508 RMB/ton at the end of the trading day, up 17% or 0.68% from the previous settlement day. The trading volume was 851,427 lots, and the position was 910,249 lots, with a daily increase of 49,080.

In terms of cost and supply, in the short term, the supply will continue to show a tightening trend combined with resonance from rainy and snowy weather, and downstream procurement demand will be released in stages, resulting in a phased increase in coal prices. However, as coal mines gradually resume work, the impact of extreme weather will weaken, supply and demand will recover, and the market will return to a weak and stable trend. The cost of methanol is mixed.

On the demand side, downstream chlorides: Mainstream factories in South China are operating at reduced loads, resulting in reduced demand for chlorides; Downstream dimethyl ether: Hebei Jichun and Lankao Huitong units have planned to operate, resulting in an increase in demand for dimethyl ether; Downstream formaldehyde: The formaldehyde plants of Binzhou Hengyun, Guanghan HuaRMB, and Hengying Chemical have restarted, and the expected start-up of Lankaohui Tongcun has led to an increase in formaldehyde demand; Downstream MTBE: Shandong Chengtai has a construction plan, resulting in an increase in MTBE demand; Downstream acetic acid: With the restart and recovery of Yankuang's large plant, the demand for acetic acid has increased. The impact of methanol demand is mixed.

On the supply side, Jiutai New Material Equipment Maintenance; Shanxi Coking, Jiutai New Materials, and Inner Mongolia Rongxin Plant have been restored. The overall loss is greater than the recovery, resulting in a decrease in capacity utilization. The supply side of methanol is affected by bearish factors.

In terms of external trading, as of the close on February 22, the closing price of methanol in the CFR Southeast Asian methanol market was $363.50-364.50/ton. The closing price of methanol in the Gulf methanol market in the United States was 103.00-104.00 cents per gallon, up 2 cents per gallon; The closing price of FOB Rotterdam methanol market is 305.75-306.75 euros/ton, up 8.75 euros/ton.

Future predictions suggest that coal may have relatively limited support for methanol production costs. The traditional downstream demand side will be improved. The methanol analyst from SunSirs predicts that the short-term domestic methanol market price consolidation will be the main focus.

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