The short-term methanol market is expected to be dominated by weak oscillations

At present, the fundamentals of methanol have not been effectively improved, especially the port inventory reached a high point during the year. With sufficient imports and weak downstream demand, high inventories will suppress methanol prices.

High inventory is difficult to digest

Since the beginning of this year, methanol imports have remained high, and domestic production has also increased, but downstream demand is not optimistic, leading to continuous accumulation of methanol port inventory. According to Wind statistics, as of August 5, the total inventory of Jiangsu ports, South China ports, and Ningbo ports (including Heyuan’s own sources of goods) totaled approximately 1,308,500 tons. At present, the coastal unloading and warehousing speed is still slow, and the August arrival forecast is still high, the port inventory pressure is difficult to ease in the short term, which will continue to be negative for the methanol market.

Changes in methanol port inventory are mainly affected by imports and downstream demand. In addition to the downstream demand, the inventory of mainland companies is also affected by the operating rate of methanol companies. Compared with port inventory, the pressure on enterprise inventory is slightly less, mainly because mainland enterprises can adjust supply by shutting down equipment for maintenance. After the Spring Festival, under the influence of the new crown pneumonia epidemic, the inventory of some samples of methanol production enterprises reached new highs in recent years. Then due to the improvement of the epidemic situation, downstream demand gradually recovered, and the pressure on enterprise inventory gradually reduced. As of August 5, some samples of production enterprises The inventory is about 549,900 tons.

The fundamentals are still not optimistic

In July, new domestic production capacity was launched, but the overall domestic methanol operating rate decreased in the early period of the month, mainly due to the large maintenance capacity, of which the operating load of the main production area in the northwest declined more significantly; at the end of July, as the maintenance capacity gradually increased Recovery, the operating rate has slowly risen, domestic supply has increased, and the inventory and shipment pressure of production enterprises has reappeared. The domestic methanol output in July was 5.3019 million tons, an increase of 29,200 tons compared with June, mainly due to the 260,000 tons/year of Shaanxi Lean and 150,000 tons/year of Hengxin Hi-Tech.

From the perspective of demand, the overall operating rate of methanol downstream in July increased month-on-month, but it has not yet recovered to the level of the same period last year. The overall start-up of the traditional downstream is better, mainly due to the recovery of Dongming Petrochemical's MTBE unit and the lifting of the load with an integrated unit equipped with acetic acid production capacity. However, the start of industries such as formaldehyde still has no improvement. The overhaul of the methanol-to-olefin capacity unit is coming to an end. As of August 6, the average operating load is about 75.96%. Among them, most of the olefin plants in East China are operating stably; the plants in Lianyungang have resumed and the load has gradually increased; the plants in Nanjing have slightly adjusted their short-term load, but they still maintain a high level of operation.


On the whole, high port inventories will continue to suppress methanol prices in the short term. The peak period for the maintenance of domestic methanol plants has passed. Many plants are expected to resume operation in August, and domestic supply will gradually increase. However, downstream maintenance devices will also be started one after another. On the other hand, the spot price of methanol is lower than the cost, and some downstream and traders are more enthusiastic about purchasing. The short-term methanol market is expected to be dominated by weak oscillations.