SunSirs: Methanol Market Donditions Varied Between Regions

Price trend

According to the SunSirs commodity market analysis system, from September 11th to 18th (as of 3:00 PM), domestic methanol prices at ports in East China rose from 2,290 RMB/ton before falling to around 2,261 RMB/ton, a 1.24% decrease over the period, a 2.46% month-over-month drop, and a 5.83% year-over-year decline. Methanol inventories at ports accumulated within a narrow range, and high levels continued to suppress the market. With no positive factorsbolstering the market, market performance remained weak. The mainland methanol market continued to rise, driven by downstream pre-holiday restocking and stable domestic olefin demand.

As of the close of trading on September 18, the closing price of methanol futures on the Zhengzhou Commodity Exchange fell. The main methanol futures contract, 2601, opened at 2,373 RMB/ton, reached a high of 2,376 RMB/ton, a low of 2,339 RMB/ton, and closed at 2,346 RMB/ton, down 34 RMB/ton, or 1.43%, from the previous trading day's settlement. Trading volume was 595,422 lots, with open interest of 942,904 lots, a daily increase of 106,296 lots.

Analysis review

Summary of methanol market prices in various regions as of September 18:

On the cost side, some coal mines temporarily halted production, tightening supply slightly, and coal prices continued to rise, costs support recovered. Methanol costs providied favorable factors for the market.

On the demand side, glacial acetic acid prices continued to rise. Formaldehyde saw some declines while the market remained stable. Dimethyl ether saw some stability with minor fluctuations. The resumption of operations at the Henan Xinlianxin plant increased on-site supply, and dimethyl ether plants showed a strong desire to reduce inventory. Most downstream products were affected by methanol prices, the impact of methanol demand was mixed.

On the supply side, Inner Mongolia Rongxin and Guizhou Tianfu plants underwent maintenance; Anhui Haoyuan, Jinmei Huayu, and Inner Mongolia Xinao plants reduced production; and Yankuang Guohong, Ningxia Baofeng, and Xianyang Petroleum plants resumed production. Overall, the restored capacity was less than the lost capacity, leading to a decline in capacity utilization. Methanol supply provided favorable factors for the market.

On the international market: As of the close of trading on September 16th, the CFR Southeast Asia methanol market closed at $325.5-326.5/ton. The FOB US Gulf methanol market closed at 98-99 cents/gallon. The FOB Rotterdam European methanol market closed at €291.5-292.5/ton.

Market outlook

As Northwest olefins producers cut back on volumes and deliveried, traders had seen limited turnover, and downstream buyers were still primarily seeking to lower prices. Methanol analysts of SunSirs predict that the domestic methanol spot market will be consolidated and wait-and-see.

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