Since the end of June, the domestic methanol market has experienced a wave of bottoming out and a rebound after nearly half a year of decline. As of August 3, the average price of domestic methanol was 2,223 yuan (ton price, the same below), a month-on-month increase of more than 12%, and the Henan and Jiangsu markets even rose by more than 14%. The general loss situation of enterprises has gradually improved.
"Beginning in late June, the downstream market of methanol has gradually recovered, and the operating rate has increased to stimulate the demand for raw material methanol. At the same time, methanol companies have also been boosted by the continuous rise of raw coal. The market continued to rebound for a time. In addition, the phased maintenance of some methanol plants in China in June also led to a reduction in regional supply. Under the combined influence, the methanol market bottomed out in the middle of the year and rebounded.
Based on the fact that the current upward momentum of the methanol market has been effectively released, and the subsequent upward momentum shows signs of weakness, it is expected that the methanol market outlook will be dominated by market recovery. "Shao Huiwen, a senior market commentator, said this.
Downstream demand grows steadily
Statistics from SunSirs show that as of late July, the comprehensive operating rate of major products such as methanol downstream methanol to olefins, formaldehyde, dimethyl ether, glacial acetic acid, methyl tert-butyl ether (MTBE), and methane chloride was 70.6 %, a month-on-month increase of 0.6%, especially the operating rate of glacial acetic acid increased by more than 12%, and downstream demand showed a steady growth momentum.
Shao Huiwen said that in addition to the demand for methanol from traditional chemical products affecting the market, urea, a major downstream product of methanol, also plays an important role in stimulating the methanol market. Since mid-June, the urea market has continued to rise, and some units that have been shut down due to market downturn and corporate losses in the early stage have been started or increased production one after another, continuously increasing the demand for raw material methanol. It can be seen from the methanol market trend chart that it basically has a positive correlation with the urea market.
Cost support helps rebound
Data shows that since June, coal prices in various parts of the country have started to rebound steadily. As of July 27, the price of Ordos pulverized coal Q5500 rose to 728 yuan, a month-on-month increase of more than 13%, forming high-cost support for coal-to-methanol enterprises .
Li Bing, a trader in Henan, said that under the background of continuously rising coal prices, coal-to-methanol enterprises in various parts of the country are forced to increase the price of methanol to absorb the cost pressure of continuous push up, although coal-to-methanol, natural gas-to-methanol and other enterprises are still in the In a state of loss, but the rebound of raw materials has allowed methanol and its downstream manufacturers to see the possibility of a market reversal. The transaction has begun to be active, and the passive follow-up of raw materials can basically be smoothly transmitted.
Methanol plant reduces burden and production
According to reports from enterprises in Inner Mongolia, Shaanxi, Henan and other places, since late June, there have been phased maintenance of methanol plants in many companies, such as methanol plants in Inner Mongolia Yigao, Zhongan United, Shaanxi Huangling, and Henan Xinlianxin. As of mid-July, the comprehensive operating rate of major domestic methanol enterprises has dropped to about 73%, a month-on-month decrease of 3%, resulting in a decline in market supply, especially the reduction in the pure commodity volume of methanol.
The person in charge of a methanol project of Zhongyuan Futures said that the increase in the domestic methanol market since mid-to-late June has a lot to do with the reduction in production of domestic methanol companies in June, especially the reduction in production in some major production areas. Price increases vary between regions. In addition, on the import side, the decline in import volume caused by the unstable operation of some foreign devices has also played a role in boosting the domestic market. It is expected that the arrival volume of methanol products in July will drop significantly compared with June, and it is estimated to be 1.1 million to 1.2 million Ton.
On the domestic front, according to the person in charge of the sales of a chemical fertilizer company in Henan Energy Group, as the price of methanol continues to rebound, the methanol units that were previously shut down for maintenance have recovery plans in August, such as Henan Energy's Sino-Singapore Chemical Industry Co., Ltd. , Zhongyuan Dahua 500,000 tons/year, Inner Mongolia Baotou Steel 200,000 tons/year, Inner Mongolia Yuanxing 1 million tons/year and other methanol plants, involving a production capacity of more than 2 million tons. If downstream demand cannot effectively grow, the methanol market will continue to rebound. Faced with resistance, the methanol market does not rule out the possibility of reorganization in the short term.
Analyses from industry insiders show that the current fundamentals of the methanol industry are not driven clearly, and the cost-side support is improving in the short-term, but still weak in the long-term. The height above the plate. However, due to factors such as the lack of cost support to the downstream and the steady growth of downstream demand, the short-term methanol market may be mainly repaired. In the medium and long term, the methanol market is still promising. (Liu Yongming)
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