SunSirs: Methanol Market Prices First Rose and Then Fell

Price trend

According to the SunSirs commodity market analysis system, from October 13th to 17th (as of 3:00 PM), domestic methanol prices at ports in East China rose from 2,288 RMB/ton before falling to around 2,280 RMB/ton, a 0.38% decrease over the period, a 0.11% decrease month-over-month, and a 7.19% decrease year-over-year. Methanol prices in mainland China were declining, with no external sourcing support for olefins. Coupled with accumulated inventory at mainland enterprises, high supply was suppressing market prices, and downstream purchasing sentiment was weak. The average price of methanol in the port market had strengthened, driven by active destocking efforts.

Analysis review

Cost Support Weakened

As of the close of trading on October 17, the closing price of methanol futures on the Zhengzhou Commodity Exchange fell. The main methanol futures contract, 2601, opened at 2,314 RMB/ton, reached a high of 2,318 RMB/ton, a low of 2,264 RMB/ton, and closed at 2,272 RMB/ton, down 24 RMB/ton, or 1.05%, from the previous trading day's settlement. Trading volume was 653,713 lots, with open interest at 1,058,725, a daily increase of 19,443.

On the cost side, a pattern of decreasing coal supply and increasing demand was emerging, driving up coal prices and supporting a rebound in costs. Methanol costs were also influenced by favorable factors.

On the demand side, traditional downstream demand was sluggish, with cautious purchasing sentiment and companies actively shipping, leading to a passive decline in market prices. Most downstream products were affected by methanol prices, leading to negative factors on the methanol demand side.

On the supply side, Yulin Kaiyue, Zhongmei Yuanxing, Jiangsu Sopo, Inner Mongolia Donghua, Ningxia Henan, and Xindongheng plants underwent maintenance; Shanxi Tianze plant reduced production; Xinjiang Zhongtai, Xinjiang Zotye, Yunnan Pioneer, and Shenhua Xilaifeng plants resumed production. Overall, capacity losses exceeded capacity recovery, leading to a decline in capacity utilization. Methanol supply was providing favorable factors for the market.

As of the close of trading on October 16, the CFR Southeast Asia methanol market closed at $324.5-325.5/ton, down $1/ton. The FOB US Gulf methanol market closed at 93.5-94.5 cents/gallon. The FOB Rotterdam European methanol market closed at €269.5-270.5/ton, down €2/ton.

Market outlook

Mainland methanol companies and traders show a clear willingness to ship, but overall market supply may increase. Methanol analysts at SunSirs predict a period of consolidation and wait-and-see activity in the domestic methanol spot market.

If you have any inquiries or purchasing needs, please feel free to contact SunSirs with support@sunsirs.com.