Weak and Volatile Methanol Market in China in July

July 31 News

According to the commodity market analysis system, from July 1st to July 31st (up to 15:00), the average price of methanol in the East China port market fell from 2,530 CNY/ton to 2,393 CNY/ton. The price decreased by 5.40% during this period, a month-on-month decrease of 14.68%, and a year-on-year decrease of 4.65%.

At the beginning of the month, as macroeconomic influences weakened and the delivery of methanol in major ports concluded, the methanol market in China quickly declined.

In the early part of the month, influenced by sufficient supply from inland areas to ports, methanol demand at ports remained low, leading to inventory accumulation. As a result, the port methanol market continued to decline recently. The inland methanol market experienced weak fluctuations, still constrained by sluggish terminal demand. Downstream buyers maintained cautious purchasing based on their basic needs, leaving the methanol market lacking upward momentum.

In the middle of the month, traditional downstream demand in the port area remained weak. Coupled with continued supply from inland sources, methanol delivery at ports remained unsatisfactory, leading to a significant accumulation of inventory and putting downward pressure on the market.

In the late part of the month, the coastal methanol market remained relatively strong, mainly boosted by macroeconomic policies. However, due to persistently weak traditional downstream demand, price increases were limited. Continued positive macroeconomic developments, coupled with low inventory levels in producing regions and some plant maintenance combined with continued external procurement needs for olefins, led to sustained strengthening of China's methanol market prices.

As of the close on July 31, the methanol futures closing price on the Zhengzhou Commodity Exchange in China fell. The main contract for methanol futures 2509 opened at 2410 CNY/ton, with a high of 2426 CNY/ton, a low of 2393 CNY/ton, and closed at 2405 CNY/ton, down 27 from the previous trading day's settlement price, a decrease of 1.11%. The volume was 528,028 lots, open interest was 564,414, and the daily change in open interest was -1,493.

Methanol Spot vs Futures Comparison Chart:

As of July 31, the summary of methanol market prices in various regions of China:

Cost Side, the contradiction between strong supply and weak demand in the coal market will ease, inventory consumption will accelerate, and cost-side support will strengthen. Positive factors influencing methanol costs are present.

Coal/Thermal Coal (Upstream Raw Material) - Methanol Price Trend Comparison Chart:

Demand Side: Glacial acetic acid: Prices of glacial acetic acid mostly remained stable. Formaldehyde: The formaldehyde market showed mixed trends. Raw material methanol prices rose, increasing costs, prompting some factories to raise prices under cost pressure. Dimethyl ether (DME): The DME market was stable with upward trends. Rising methanol prices boosted sentiment for price increases in Hebei and Shandong regions. Most downstream products increased due to the impact of rising methanol prices, indicating a favorable demand side influence.

Methanol-Acetic Acid (Downstream Product) Price Trend Comparison Chart:

Methanol-MTBE (downstream product) price trend comparison chart:

Supply side, Ordos Chlor-Alkali Chemical, Xufeng Heyuan, Xinjiang Zhongtai, Chifeng Boyuan, Jinfeng Wenxi, and Shanxi Lubao are undergoing plant maintenance; Sinopec Great Wall facility has reduced production. Yulin Keyue, Inner Mongolia Dongri, and Yulin Yankuang facilities have resumed operations. Overall, the amount of resumed production is greater than the amount lost, leading to an increase in the capacity utilization rate. The methanol supply side is influenced by bearish factors.

Regarding external markets, as of the close on July 30, the CFR Southeast Asia methanol market closed at USD 332.50-333.50 per ton. The US Gulf methanol market closed at 95-96 cents/gallon, down 1 cent/gallon; the FOB Rotterdam methanol market closed at EUR 245.5-246.5 per ton, up EUR 7 per ton.

Outlook for the future will focus on the acceptance of high-priced goods by traditional downstream sectors and the impact on the market from the resumption of production by some maintenance enterprises. Methanol analysts predict that the Chinese methanol spot market will remain strong.