What was the trend of methanol before the 'May 1st' holiday?

After the domestic methanol futures completed the month-shifting of the domestic methanol futures last week, the main 2109 contract fell to 2320 CNY/ton and stopped falling and rose again, and the futures price returned to above the 2450 CNY/ton. Recently, most of the domestic methanol companies in the northwestern region are still in the state of suspension of sales restrictions, supply pressure is greatly reduced, and downstream olefin demand remains strong, overseas installations are overhauled, the port low inventory pattern continues, tight supply and demand are expected to support methanol to maintain strong operation .

Limited domestic methanol supply

From the perspective of the supply side, under the background of seasonal maintenance and dual control of energy consumption, most companies in the main domestic methanol production areas have little overall inventory pressure recently, and there are not many circulated sources in the market. Some manufacturers have stopped selling operations and have limited installations. For cars, traders are becoming more bullish. Data show that since mid-April, most of the domestic methanol companies in the northwest region have taken measures to stop sales, such as Rongxin, Xinao, Excelle, Yankuang, Shilin and other methanol production companies. In the short term, the spring inspection of methanol production capacity has not yet ended, supply pressure has not risen significantly, and the performance of spot methanol is firm. According to statistics, as of the week of April 16, the average operating rate of the methanol industry across the country was 76.74%, a slight increase of 1.48% on a week-on-week basis. Since the beginning of April, the spot price of methanol in Jiangsu has steadily increased, with the highest quotation reaching 2,485 CNY/ton. On the whole, the mainland is currently out of stock for a short period of time, and the production areas are willing to pay more.

Overhaul of overseas installations

In terms of international methanol, the current overseas methanol maintenance capacity is too large and the supply source is insufficient. Although Iran’s FPC annual production of 1 million tons of methanol has been restarted after half a month’s shutdown for maintenance, Iran’s Kimia’s annual production of 1.65 million tons of methanol has been temporarily shut down due to pipeline problems and the restart time is yet to be determined. At the same time, Iran’s ZPC methanol plant with an annual output of 1.65 million tons is scheduled to be overhauled in mid-May. Therefore, Iran’s methanol supply is tight during the period from late April to mid-May. Iran, as China's main overseas methanol supplier, has increased equipment overhauls, which means that external supply pressure is reduced.

In addition, Trinidad and Tobago MHTL's 2.45 million tons methanol plant shut down due to raw material problems, and the restart time is undetermined. In the context of the overhaul of multiple units, it is difficult to find low-priced sources of methanol in the overseas methanol market. It is understood that recently the focus of methanol market quotations in Europe and the United States has steadily moved upwards. Among them, the European methanol market price rebounded to 320 euros/ton, and the US market quotation rose to 403 US dollars/ton, with a month-on-month increase of 2% to 3%.

Domestic port inventory accumulation cycle delayed

At the moment, there is still a gap in the supply side of overseas methanol, so the cargo imported to China is limited, and the cycle of accumulation of methanol inventory at domestic ports has been postponed. Although methanol cargoes arriving at Hong Kong will increase slightly in late April, it is estimated that the methanol from coastal areas will arrive at about 635,000 tons from April 16 to May 2. However, recently, liquid chemicals are concentrated in ports for unloading and large methanol import ships also need to line up for unloading. The unloading cycle has been extended again. Therefore, the accumulation period of domestic methanol ports may be postponed in the future.

In general, benefiting from the lack of supply in the domestic and foreign methanol markets, the delay of the port storage cycle, and the mismatch of supply and demand, the methanol futures prices remain strong. It is expected that the methanol 2109 contract before May 1st will continue to be strong.