Unexpected rise in crude oil drives methanol to rise

After entering December, the international methanol plant, which has been firm for a year, began to undergo accidental overhauls. Malaysia’s 1.75 million and 650,000 tons methanol plants were the first to have problems. A set of 1.65 million tons/year in Saudi Arabia and 2.3 million tons/year in New Zealand also exposed accidental overhauls. Routine maintenance of US OCI and South American devices helped the market rise.

While the number of international maintenance facilities has increased, domestic methanol installations remain unstable. The natural gas-to-methanol installation in the southwestern region originally scheduled for maintenance at the end of 2019 was unexpectedly shut down for maintenance in early December. The start-up plan was postponed from early January 2020 to mid January. As early as the end of November, due to the severe smog in North China, some methanol plants in Hebei, Shanxi, and Shandong were also shut down for maintenance, which caused a significant reduction in mainland supply.

Due to the shrinkage of the maintenance and supply of the outer ports in the coastal areas and the backflow of the mainland, the inventory has rapidly fallen from 1.2 million tons to less than 900,000 tons. Among them, some reservoir areas north of the Yangtze River have even experienced long-term inventories of less than 10,000 tons. The Jiangbei Reservoir area, which was previously "unseen", was hot for a while, and the price was even higher than 30-50 CNY/ton in Taicang.

In December 2019, the continuous upward swing of crude oil once provided support for the rise of methanol. The prices of MTBE and other products in the downstream of methanol increased, driving the price of methanol stronger. However, in late December, the upward kinetic energy of crude oil gradually weakened, and the top horizontal The situation of the plate restricts the continued rise of methanol.

At the beginning of the new year, crude oil prices suddenly rose sharply, driving downstream methanol products higher. The domestic methanol period is now rising simultaneously. The main contract of methanol futures MA2005 rose over 100 CNY/ton in two days, from 2190 CNY/ton to around 2300 CNY/ton.