On January 23, FOB Rotterdam was stable with prices ranging from $626 to $631 per ton.

On January 22, the hydrofluoric acid commodity index was 114.56, which was the same as yesterday. It was 18.42% lower than the peak of 140.43 points in the cycle (2018-02-21), and 113.77% higher than the low of 53.59 points on November 30, 2016. (Note: Period refers to 2011-09-01 to date)

According to statistics, the price trend of domestic hydrofluoric acid market has been lower recently. The domestic market price of hydrofluoric acid is 12625 yuan/ton as of the 23rd day, and the domestic start-up rate of hydrofluoric acid is about 60%. Enterprises reflect that the supply of hydrofluoric acid on the spot is sufficient at present, the situation of goods on the spot is getting worse recently. Some enterprises have increased their hydrofluoric acid stocks and slightly lowered their ex-factory prices, but due to the high expenditure of raw material market. The market price of hydrofluoric acid has fallen by a very limited margin. At present, the mainstream of hydrofluoric acid negotiations in the southern region is about 12,000-12,500 yuan/ton, while the price of hydrofluoric acid in the northern market is 12,000-13,000 yuan/ton. Domestic hydrofluoric acid market price trend is slightly lower, spot supply is sufficient, due to the recent high prices of raw materials market, fluorite prices are in a high state, but the price of raw materials fluorite slightly declined, the market price of hydrofluoric acid slightly lower.

Recent downstream refrigerant product maintenance devices are more, the demand for upstream fluorite and hydrofluoric acid has weakened, the recent downstream refrigerant trading market has declined, and the price of hydrofluoric acid products has slightly decreased. Recent downstream refrigerant market transactions are cool, R22 refrigerant facility starts at 70%, R22 refrigerant facility start-up rate declines, the main production enterprise bulk water out-of-factory offer price drops to 17500-18500 yuan/ton, but the production enterprise does not have bulk water spot, mainly with a small number of cylinders shipped. In addition, the actual demand side of the market has declined, and the shipment market trend is poor. The domestic market price of R134a is slightly lower, the start-up rate of production enterprises is lower, the market demand for refrigerants is weakened, and manufacturers mainly export their products. However, the on-site transaction price does not change much, and the merchants purchase on demand. Recently, due to the impact of equipment maintenance, the upstream market demand for hydrofluoric acid has weakened.

Refrigerant on-site transaction prices slightly lower, refrigerant industry equipment overhaul increased, the upstream hydrofluoric acid market demand weakened, coupled with the upstream refrigerant industry to resist high prices of raw materials, Business Analyst Chen Ling believes that the hydrofluoric acid market may continue to decline, hydrofluoric acid prices will be around 12,500 yuan/ton.

Price Trend
According to the price monitoring of business associations, as of January 22, the average price of domestic methanol market was 2218 yuan/ton. Overall, the domestic methanol market was mainly consolidated, and the price fell 33.70% compared with the same period last year.

II. Market Analysis

Products: Domestic methanol market operates differently. Driven by crude oil, macro and other peripheral information, the overall performance of the port is slightly better than that of the mainland market; the two major mainstream ports moved up 50-75 yuan/ton, while many mainland markets maintained the expected downward trend, falling by 30-70 yuan/ton. As far as the external driving factors are concerned, we need to continue to pay attention to the transmission of energy and chemicals caused by the explosion and fire of the Gulf of Mexico oil pipeline; and return to the basic level, with the influence of the Spring Festival atmosphere becoming stronger, local capacity gradually tightening, terminal demand slowing down and so on. In the short term, based on depot drainage drive, the probability of continuing shocks in the Mainland is obvious. In addition, Wen Wenzhejiang olefin enterprise ethylene glycol project plan to restart, pay attention to MTO start-up action. Domestic freight for methanol has been partially lowered in recent days. In some areas, freight has been lowered by 20-60 yuan/ton. It is known that the number of vehicles continues to decrease.

Industry chain: formaldehyde: raw material finishing is the main, formaldehyde in Shandong Province has been light in recent days, the market has not changed much, part of the construction began to decline. At present, Linyi is around 1080-1100 yuan/ton, Zibo and its surrounding areas are around 1200-1300 yuan/ton. Acetic acid: The domestic glacial acetic acid market is stable. Traders are cautious and wait-and-see. With the approaching of Spring Festival holidays, logistics holidays one after another, the market atmosphere gradually weakened. However, considering the decline in inventory, enterprises have a higher intention to push up their offer, and some enterprises plan to raise 50 yuan/ton. Dimethyl ether: End users’enthusiasm for entering the market continues to weaken, sellers’ sales are under pressure, dimethyl ether market prices are wide short, short-term sellers will continue to dominate the volume of warehouse drainage, and many continue to short expectations.

3. Future Market Forecast

On the positive side, olefins: At present, methanol prices are at a low level, and the economic recovery of olefins is still acceptable, focusing on domestic MTO stoppage and restart operations; crude oil: the crude oil market has risen, affecting the methanol futures market, providing some favorable support; futures: the futures market has risen substantially, which has a certain support for port methanol; macro-level: the State Council pushes for universal benefits. Sexual tax cuts reduce the burden of small and micro enterprises. On the negative side, raw materials: coal prices are relatively stable, but natural gas has not performed well in the near future, the upstream supply is sufficient, prices continue to fall, and cost support is insufficient; start-up: more than 70% of domestic methanol local start-up, the main areas start relatively stable, supply is sufficient; port: recent port arrival concentration, inventory accumulation is obvious; demand side: near the Spring Festival, the current downstream. Reserves are approaching the end one after another, and the intention of some upstream factories to drain warehouses is still obvious. Some of them continue to reduce prices to drain warehouses, affecting the surrounding markets. Methanol analysts at business associations predict that short-term domestic methanol market or narrow-band consolidation will dominate.

According to the data released by the National Bureau of Statistics on January 21, in December 2018, the value added of industries above the scale increased by 5.7% compared with the year before, and by 0.54% annually. Among them, the manufacturing of chemical raw materials and chemicals increased by 1.8%.

In three categories, in December, the value-added of mining industry increased by 3.6% year-on-year, 1.3 percentage points faster than in November; the manufacturing industry increased by 5.5% and fell by 0.1 percentage points; and the production and supply of electricity, heat, gas and water increased by 9.6% and fell by 0.2 percentage points.

In terms of economic types, in December, the added value of state-owned holding enterprises increased by 3.6%, collective enterprises decreased by 1.4%, joint-stock enterprises increased by 7.0%, and foreign and Hong Kong, Macao and Taiwan-invested enterprises increased by 1.7%. In December, 37 of the 41 major industries maintained year-on-year growth in value added. Among them, agricultural and sideline food processing industry grew by 5.9%, textile industry by 0.2%, chemical raw materials and chemical products manufacturing industry by 1.8%, non-metallic mineral products industry by 8.8%, ferrous metal smelting and calendering industry by 9.2%, non-ferrous metal smelting and calendering industry by 13.2%, general equipment manufacturing industry by 6.5%, special equipment manufacturing industry by 11.7%, automobile manufacturing industry by 4.1%. Railway, ship, aerospace and other transport equipment manufacturing industry grew by 13.8%, electrical machinery and equipment manufacturing industry by 10.1%, computer, communications and other electronic equipment manufacturing industry by 10.5%, and power, thermal production and supply industry by 8.3%.

Regionally, in December, the added value of the eastern region increased by 5.0%, the central region by 8.3%, the western region by 7.7%, and the northeastern region by 7.5%.

In December, 330 of 596 products increased year-on-year. Among them, 93.65 million tons of steel, an increase of 9.1%; 18.89 million tons of cement, an increase of 4.3%; 5.08 million tons of ten non-ferrous metals, an increase of 10.0%; 1.6 million tons of ethylene, a decrease of 0.1%; 25.26 million cars, a decrease of 14.9%, of which 103 million cars, a decrease of 17.1%; 620 billion kWh of electricity generation, an increase of 6.2%; 51.17 million tons of crude oil processing, an increase of 44%.

In December, the product sales rate of industrial enterprises was 98.5%, down 0.3 percentage points from the same month last year. Industrial enterprises realized export delivery value of 1174.9 billion yuan, an increase of 4.1% over the same period last year.

In the whole year of 2018, the value-added of industries above scale increased by 6.2% year on year, and the growth rate dropped by 0.1 percentage points from January to November.

The Trump government’s continued permission to export Iranian oil may be another catalyst for this year’s decline in oil prices.

Brian Hook, the Trump administration’s special representative for Iran, refused to make clear over the weekend whether the White House would impose stricter sanctions on Iranian oil exports.

“We do not intend to grant any exemptions or exceptions to Iranian crude oil imports,” Hook said at the Atlantic Council Global Energy Forum 2019 in Abu Dhabi last weekend. But when asked by CNBC whether the government would extend the exemption, he said he could not answer the question:

“I can only say that we believe that when we have a better oil market, it will put us in a much better environment, thus speeding up the realization of zero Iranian crude oil exports.”

Market analysis points out that Hook’s comments indicate that the U.S. government’s decision to impose sanctions will depend to some extent on the price of crude oil.

Michael Cohen, head of energy market research at Barclays, said: “I think this administration has made it clear to some of us that there has been a relationship between oil prices and the implementation of sanctions for some time.”

Cohen had previously pointed out that crude oil prices below $60 a barrel would encourage the Trump government to impose more stringent sanctions to force buyers to cut off imports from Iran, while a rebound in oil prices above $80 a barrel could force the government to allow large quantities of Iranian crude oil to enter the market.

However, some analyses point out that the link between oil prices and exemptions from sanctions is to some extent a smokescreen.

Amos Hochstein, a former international energy envoy, said the real reason Trump’s government approved the exemption was that it could not reach an agreement with some of Iran’s biggest customers to stop buying oil from the Islamic Republic. Hochstein was responsible for sanctions against Iran under former US President Barack Obama.

According to Hochstein, this increases the possibility that the United States will be forced to sanction Chinese or Indian companies:

The reason is that if you don’t grant immunity and someone is importing, then you have to sanction them, and you may not want to sanction them.

Hook had previously stressed that the exemption was intended to allow countries to continue buying Iranian crude oil as long as they proved they were reducing their purchases.

But Hochstein argues that these so-called exemptions actually encourage countries to continue buying Iranian oil:

If a country reduces its crude oil imports to zero, it will not be able to import Iranian crude oil again until sanctions are lifted.

The real question is not how much exemption you give, but how many countries continue to import.

China, India, Turkey and South Korea have imported crude oil from Iran since the resumption of sanctions on November 5, according to data from ClipperData, an oil tanker tracking company.

ClipperData said China accounted for the largest share, with crude oil imports of 576,000 barrels a day in December. South Korea resumed its crude oil purchases this month, with recent imports of 300,000 barrels a day.

Japanese economic news had previously reported that Japan intended to resume oil imports from Iran as early as this month.

Nevertheless, Reuters reports that Iran’s daily oil production has dropped sharply from 2.5 million barrels before sanctions began last year to less than 1 million barrels.