From the profit distribution of the industrial chain, the prospects of methanol

In December, a wave of gas restrictions in Iran pushed up methanol by more than 2,500 yuan. Unexpectedly, the incident turned out to be a turning point in the market. Since then, methanol has been sluggish, and it has been able to take the round of gains in December last year. Even if Iran's gas restrictions are not as exaggerated as the hype, some of the installations are actually stopped. The import reduction in the first quarter is a foregone conclusion. Why will methanol continue to fall?

What is even more different is that with the weakening of the disk, the methanol basis has turned from negative to positive, and constantly refreshed the strongest level in the one-year cycle, reflecting the strong spot in East China. The root cause is that the supply of US dollars continues to be strong. Last week, the average weekly price of CRF China was reported at 310 US dollars, nearly 50 US dollars higher than the beginning of last year, and the current methanol market is almost the same as at the beginning of last year. The reason for the strong supply of US dollars is related to the sharp decline in methanol operating rate globally, but the expected increase next year will be sufficient. This is something later.

And this phenomenon raises another question. Usually the methanol tray is anchored in the port. Is the tray so weak now that it is priced inland? Recently, there have been rumors in the circle that Henan Dahua, Dingzhou Tianlu, and Phoenix are going to issue warehouse receipts, and the appearance of low-priced inland warehouse receipts will indeed affect the mentality of the methanol market. Because where the delivery cost is the lowest, it is more "inferior" within the scope of delivery quality requirements, that is, the anchor for the board transaction. However, for most of last year, Dahua issued a small number of warehouse receipts in the fourth quarter, and the total amount of warehouse receipts in the highest peak mainland did not exceed 10% of the total warehouse receipts.

However, this pattern has slowly changed in the near future. The main reason is the concentrated production of Northwest Yanchang China Coal, Shenhua Yulin and E Energy Chemical (recently), and the concentrated release of short-term production capacity has made the Northwest quotation clearly expected to be under pressure. Factors such as the Hebei epidemic have led to certain transfer orders in the northwest source of goods, making the mainland source of goods relatively weak. The strength and weakness of the inland ports have changed the previous spread pattern, making the spread between Henan, Shandong, Hebei and other intermediate trade areas to East China greater than the premiums and discounts of freight and delivery depots. A direct result of the regional price difference being greater than the premium and discount is that the mainland enterprises have been driven by local warehouse receipts, so they have been rumored.

However, although the warehouse receipts are issued in the Mainland, the logistics window between the Mainland and East China is open. Isn’t it enough for the long-term to receive the Mainland warehouse receipts and directly pull them to the port? Why is the disk pressure due to the warehouse receipts in the Mainland? According to the analysis of South China Research Paper, unless it is a large-scale olefin plant along the coast, it is not a simple matter for ordinary traders to receive warehouse receipts and reprocess them inland. Therefore, as long as the mainland issues warehouse receipts, there will be more obvious worries about receiving goods.

This is an interpretation of the unusually weak methanol disk from a trade perspective. So from the perspective of profit distribution in the industry chain, what are your expectations for the future height of methanol? A few words: not optimistic.

As a chemical intermediate product, methanol has strong upper and lower boundaries. The lower boundary is mainly the cost, and the upper boundary is mainly the profit of downstream products. Of course, the most influential one is MTO. After December, as the price of methanol rose, conflicts began to appear in the downstream. Dimethyl ether and MTBE continued to be in a state of loss, and MTO also experienced periodic losses, causing the price to rise above 2300 and gradually face pressure, and olefins (PP , PE) after rising to a high level, it entered the adjustment before methanol in mid-December.

The olefin itself is still in the production cycle in 2021, and demand is unlikely to grow at a rate in 2020. Supply and demand are still surplus, so it is difficult to withstand high-priced methanol. However, Changzhou Fude's March operation, which everyone reported on the demand side recently, is extremely high. Can it be realized under the current MTO profit? You must know that this device was originally stopped because of profit problems, so naturally it would not choose to restart at a point in time when production resumed and it lost money. As for the speculation on the supply side of the 05 contract, the current import contraction is expected to be between January and March, and the end of the southwestern gas head contraction period is also around February and March. The full realization of the pressure of Northwest production will be in February, that is, the supply side is more positive. It ends around March. From this perspective, it is true that the second half of the 05 contract should not be reported to have high expectations, only to be up and cherish!