Ample supply of formaldehyde in the near future

The current state of the methanol market is difficult to continue. First of all, the natural gas-to-methanol plant in the southwest region will have a gas limit of about one month this year. Early gas limit shutdown means that the maintenance will be completed before the start of the operation. This will severely suppress the methanol market in January next year. Secondly, the methanol installations overhauled in Shaanxi, Gansu, and Inner Mongolia have been fully restarted at the beginning of this week. In addition, the methanol installations restarted in northern Shaanxi have been re-established with considerable supply capacity. This week ’s price decline in Northwest China is also for the same reason.

The closure of the port area due to heavy fog has recently been gradually lifted. Ships stranded have gradually begun to unload. According to incomplete statistics, about 150,000 tons of methanol are currently stranded in the port. There will be a surge in regional inventory.

In terms of downstream demand, the recent smog in the north is severe, and a new round of environmental protection and production restrictions has begun. In December, the operating rate of formaldehyde will gradually decline, and the decline in methanol demand is an indisputable fact.

Winter is a stable period for the operation of the northern methanol plant. Unless there is an accident, the possibility of maintenance in winter is low. The inland methanol plant will always maintain a high start-up and the supply is relatively stable. The downstream demand for methanol in coastal areas will be significantly weakened, and traditional downstream operations will be reduced. Some methanol-to-olefins plants are also scheduled to be overhauled in December. Under the premise that the volume of imports and ports is not reduced, the supply pressure in port areas is not optimistic. It is worth mentioning that despite the decline in inventories in the port area, the tradable inventory remained above 300,000 tons, indicating that the supply is still abundant.

To sum up, the short-term prosperity of the market due to the unexpected combination of factors in the early stage may come to an end. At present, the 2001 contract of methanol is close to delivery, and the holding position is larger than the same period of previous years, indicating that the market is still bearish on the market outlook.