Weakness in China's Methanol Market Continues in November

November 28th, news:

According to the commodity market analysis system, from November 1 to 28 (up to 15:00), the average price of methanol in the East China port market in China fell and then rose from 2155 CNY/ton to 2115 CNY/ton. The price decreased by 1.86% during the period, with a maximum fluctuation of 7.42%, and a year-on-year decrease of 22.67%.

In November, the Chinese methanol market as a whole showed a trend of first declining and then rising. The port market continued to face high inventory pressure, with high supply levels continuously suppressing prices. During this period, import apparent demand increased, but inventories still accumulated. Additionally, factors such as cargo backflow led to a persistent supply-demand contradiction, causing overall price fluctuations and a downward trend. At the end of the month, news of restricted overseas natural gas supply provided a boost, leading to the gradual shutdown of overseas facilities, which may cause port inventories to peak. As a result, port market prices stopped falling and began to rise, ending the previous downward trend.

As of the close on November 28, the methanol futures closing price on the Zhengzhou Commodity Exchange in China increased. The main methanol futures contract 2601 opened at 2,115 CNY/ton, with a high of 2,138 CNY/ton, a low of 2,113 CNY/ton, and closed at 2,135 CNY/ton, up 18 yuan or 0.85% from the previous trading day's settlement. The trading volume was 942,920, the open interest was 1,048,516, and the daily change in open interest was -56,142.

Methanol Spot and Futures Comparison Chart:

As of November 28, the summary of methanol market prices in various regions of China:

Cost Perspective: In November, the imported thermal coal market showed relatively active performance, with coal prices continuing their stable-to-strong trend. Market quotes were all raised, and sentiment improved somewhat. Compared to domestic coal prices, imported coal prices still enjoy a significant advantage, thereby supporting market activity. As overseas mines closely monitor changes in the Chinese market, price-supporting sentiment has intensified, leading to sustained firmness in overseas mine quotes. With seasonal cooling boosting end-users’ willingness to replenish inventories, coupled with tighter supply from producing regions toward year-end, most importers have become more optimistic about market prospects, providing strong support for coal prices. The cost factors for methanol also point to a generally favorable outlook.

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

Demand Side, the pressure on the demand side is quite significant. Recent price decreases in the secondary and tertiary markets have led many industries into a situation of severe profit losses, significantly constraining the purchasing enthusiasm and actual demand for methanol. The reduction in demand in November is expected to be particularly evident in the MTO (methanol-to-olefins) industry, which, as a core consumer sector downstream of methanol, has a particularly critical impact on the market. The demand for methanol is influenced by the prices of most downstream products, and the overall demand outlook for methanol is affected by bearish factors.

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

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

Supply Side: Plant maintenance at Changsheng in Jixiu and Xianyang Petroleum; reduction in production at Anhui Haoyuan and Inner Mongolia Black Cat facilities; resumption of operations at Zhejiang Juhua and Guotai Xinhua. With planned maintenance and reduced production facilities decreasing, and the number of resumed operations increasing, the overall market supply is expected to increase. The supply side of methanol is influenced by bearish factors.

On the international market, as of the close on November 28, the CFR Southeast Asia methanol market closed at USD 316.5–317.5 per ton. The FOB U.S. Gulf methanol market was closed due to a public holiday; the European FOB Rotterdam methanol market closed at EUR 259.5–260.5 per ton, up EUR 4 per ton.

Market Forecast: Apart from the gradual seasonal shutdowns of some gas-based methanol plants in Sichuan and Chongqing, it remains crucial to closely monitor Iran’s temperature conditions and the actual impact of the methanol projects’ shutdowns. Methanol analysts expect limited volatility in China’s spot methanol market.