In August 2019, the domestic methanol market rose first and then fell. According to the price monitoring of business associations, the average domestic methanol price was 1970 yuan/ton at the beginning of the month and 1994 yuan/ton at the end of the month. The average domestic methanol price rose by 1.22% and the maximum amplitude was 12.89%. The price fell by 2.52% compared with the same period last year.
II. Market Analysis
Products: Domestic methanol mainland market rebounded in the first half of August, and returned to the downward channel in the second half of August. The Shandong market rebounded first in the first ten days due to the centralized equipment maintenance and the downstream periodic stock reserve, with an increase of 200 yuan/ton. The methanol market declined rapidly due to the concentrated pressure of the supply increase and the low futures market in the second ten days. The harbor shocks are narrow, stable in the first ten days and weak in the second ten days. In terms of newly built methanol to olefins in China, 600,000 tons per year in Jiutai, Inner Mongolia, 600,000 tons per year in Chengzhi, Nanjing and 1.8 million tons per year in Zhongan combined MTO plant produced dimerization in early August.
Industry chain: formaldehyde: This month, the formaldehyde market rose narrowly compared with July. Affected by the upstream methanol market, the formaldehyde market rose narrowly in the early and middle of this month, but the downstream demand was low and the volume of single transactions was weak. After the middle of this month, the upstream methanol market began to decline, but the downstream market started to improve slightly, combined with the overall low start of the formaldehyde market, the low market supply and the downstream demand increased. Under the influence, the offer of formaldehyde enterprises is stable and the profit margin is good, but the overall transaction has not reached the ideal state. In September, under the influence of environmental protection policy, the formaldehyde and downstream market will start or be limited, and the cost side has fallen to a relatively low level. It is expected that the formaldehyde market will oscillate lower in early September.
Dimethyl ether: In August, domestic dimethyl ether market prices rose and fell. At the beginning of the month, due to the relatively high profit of two methyl ether, the enterprises started to increase. The increase in the quantity of goods supplied by the market resulted in the lack of price rise and signs of decline, while the terminal was on the right track, and the turnover was not strong enough. In order to avoid further price declines, the Enterprises Limited sales and promoted prices. End-to-end demand support is insufficient and the market continues to fall into a weak situation. In order to avoid falling prices, Xinlian began to implement a bottom-keeping policy, thus protecting market prices sideways. However, with the rising price of raw material methanol, the profit margin of enterprises is gradually narrowed, so the cost factors promote the overall rise of dimethyl ether prices. In the situation of dimethyl ether price rising continuously and narrowly, some shortage traders began to purchase on demand, but did not cause a large-scale incremental trading in the market. The overall performance was general, and prices fell negatively. Dimethyl ether (DME) trade continued to show a cool performance after the late ten days. Even if mainstream enterprises intervened in the market, it had limited impact on the market. During this month, Xinlian carried out several bottom-guaranteed policies. After the settlement price was announced, there were signs of a small price increase. However, due to the negative impact of the market, it is difficult for prices to rise.
Acetic acid: The domestic acetic acid market has risen sharply this month, with a rise of 650 yuan/ton in Jiangsu and 700 yuan/ton in North China. At the beginning of the month, the East China supplier was informed of the production restriction and the 800,000 tons acetic acid plant in Soap, Jiangsu, was shut down, which led to the downstream active purchase of spare goods under the fear of acetic acid upsurge in the later period, and promoted the market to rise at a low level. Afterwards, due to the overhaul and shutdown of the air separation unit and the planned overhaul of the Huayi plant in Anhui Province, the acetic acid Market in Shaanxi Province continued to rise and the price gradually increased. In view of the sustained bullish mood in the latter period, the acetic acid export orders increased significantly this month, encountering the advantages of BP in Malaysia and Celanese in Singapore, such as parking overhaul in the latter period, domestic suppliers’supply and replenishment, which made the domestic acetic acid market short of supply and demand. Considering the substantive digestion of the downstream, the supplier’s increase was mainly rational.
Industry: According to the price monitoring of business associations, in August 2019, there were five kinds of commodities rising in the energy sector, of which more than 5% increased, accounting for 6.3% of the monitored commodities in the sector. The top three commodities were MTBE (8.16%), gasoline (2.24%) and methanol (1.22%). There are 11 kinds of commodities with a decline of more than 5%, accounting for 25% of the monitored commodities in this sector. The products with the first three declines are dimethyl ether (-9.03%), liquefied natural gas (-7.08%) and Brent crude oil (-6.28%). This month’s average rise and fall was -1.52%.
3. Future Market Forecast
On the positive side, methanol in the mainland continued to decline in late August, with local market prices falling to the production cost of methanol plants; new methanol-to-olefin plants were put into operation one after another, while MTO load of Phase II of Chengzhi in Nanjing was not high; production time of Baofeng in Shandong, Luxi and Ningxia was delayed; with the early maintenance of olefin plants, such as Ningxia, was resumed one after another. Pound, Shenhua Yulin, etc., olefin start-up has been restored. On the negative side, the arrival of methanol in the port is concentrated, with an estimated arrival of more than 1 million tons in August and 90-950,000 tons in September; 700,000 tons in Yankuang Yulin are planned to be put into operation in October under the orderly construction of new methanol plants in China; Rongxin in Inner Mongolia is expected to be put into operation in September; Yingde in Jingmen in late August; near the National Day, the Northern Environmental Protection Supervision The surveillance was strengthened and formaldehyde trade unions in the north were expected to decline in September. With the concentrated release of bad news such as high inventory of methanol ports, abundant inventory in the mainland and weak downstream traditional demand, the relative supply-over-demand pattern of methanol has not changed. Methanol analysts of business associations predict that the short-term domestic methanol market will continue to be vulnerable to shocks. With the advent of National Day, environmental protection and safety inspections in the north are rigorous, and information about the policy of production restriction needs to be paid attention to.