Methanol fundamentals continue to improve

Since January, the port methanol inventory has gradually decreased, and the demand is relatively good, but the methanol futures price has continued to fall. The main reason is the poor storage of factories in the mainland, which reduces prices and promotes sales. At the same time, due to the high freight rates in winter, the increase in long-distance inter-regional transportation costs, and the lack of willingness to receive goods downstream, the mainland market atmosphere is weak.

　　 Mainland manufacturers cut prices before the holiday

　　 my country's coal-to-methanol production capacity is mainly distributed in the northwestern region. At the beginning of the new year, methanol prices in Xinjiang turned down. From around 1500 CNY/ton in early January to below 1400 CNY/ton, the decline was more than 100 yuan per ton. At present, the manufacturers' inventory is not high, but the progress of new orders is slow, which leads to the slower than expected storage speed before the Spring Festival. The lack of pre-sale orders will affect inventory management after the Spring Festival and put pressure on production companies. At the same time, the current high domestic freight rates are not conducive to the inventory sales of mainland manufacturers.

　　 Although Zhengzhou Coal has fallen sharply recently, the 5,500 kcal of Ordos pulverized coal has remained above 550 CNY/ton, so the raw material cost of mainland manufacturers has not shrunk. Methanol manufacturers’ price cuts are mainly in response to storage capacity management. With the weakening of methanol prices, the theoretical value of production profits of methanol companies in Inner Mongolia and Shandong is currently negative. Therefore, the cost of coal-to-methanol is supported, and subsequent prices continue to fall. Not big.

　　The start of the gas head device is expected to decline

　　 Generally speaking, every winter, the country will ensure that residents use gas as a priority. Therefore, many methanol production plants that use natural gas as raw materials will stop and decrease. This is also one of the reasons for the strong methanol price in the fourth quarter of last year. As the Spring Festival approached, the market began to pay attention to the driving situation of the spring air head device. With the expectation that the Sichuan-Chongqing gas head unit will restart with a high probability in the short term, the downstream stocks are cautiously stocked before the Spring Festival.

　　 On the other hand, in the case of repeated epidemics, the demand for terminal boards and other materials has weakened, and the operating rate of traditional downstream such as formaldehyde has decreased. The operating rate of formaldehyde dropped rapidly from the high in December last year. Regarding acetic acid, despite the good market demand, the Tianjin Soda Plant and Henan Shunda's acetic acid plant were shut down, the Celanese plant was running at reduced load, and the overall operating rate dropped.

　　New demand remains strong

　　 In contrast to new demand, the current methanol-to-olefin operating rate has been maintaining a high level. The operating rate of domestic MTO devices increased last week, mainly due to the start-up of Yangmei Hengtong and Qinghai Salt Lake devices, while other devices maintained their previous levels. In addition, Datang International's installations will reach full capacity. The overall operating rate of olefins is expected to continue to rise slightly. As of January 27, the "two oils" polyolefin inventory was 490,000 tons, down 30,000 tons per day. At present, the inventory of PE and PP downstream of methanol remains de-stocked, and the pressure is relatively small. At the same time, due to the recent epidemic prevention demand, the production of fiber material PP has increased, and the demand for polyolefins remains strong. The MTO operating rate will remain high in the short term.

　　 In terms of inventory, since the fourth quarter of last year, methanol port inventory has gradually declined, and has now fallen below 1 million tons, which is a normal level compared with the same period in previous years. The decline in port inventory reflects the higher operating rate of MTO devices in coastal areas. At the same time, the unexpected shrinkage of imported methanol also contributed to the continued decline of methanol port inventories. At present, Iran's gas restriction is still continuing, and the load of its methanol companies is at a low level, and it is expected to continue to decline in the later period. Most of the non-Iranian cargoes are willing to go to high-priced regions outside China to profit, and the import volume is expected to be further reduced later. If the Iranian plant continues to operate poorly, the price of methanol may increase.

　　 From the perspective of the coal-methanol-polyolefin industry chain, methanol is currently cost-effective. At the same time, from a fundamental point of view, methanol port inventory is low, imports remain low, and the downstream MTO operating rate is relatively high. Therefore, methanol will gradually get better in the later stage.