China’s domestic methanol market consolidation on January 22

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.