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Supply and demand side news disturbance frequent methanol plate game intensified
2023/6/8
Methanol price center of gravity has shifted significantly downward since late April, and under the resonant pressure of falling coal and expected port accumulation, the methanol main contract price once fell through the RMB 2000 yuan/ton line. Along with some logical early trading, the plate recently saw a short-term repair market, and as of June 6, the MA2309 contract closed at RMB2,041/mt, a rebound of about 100 points from the late May low. In the context of short-term weak stabilization of coal prices and frequent news disturbances on the supply and demand side of methanol itself, the methanol plate game has intensified, with frequent fluctuations but relatively limited space, and methanol is still a weak species in the medium to long term from the marginal price trend downwards.
Short-term coal impact or weakening
Comparing coal and methanol prices after the holidays, the two trends are similar, and the market outbreak nodes basically coincide. From the beginning of February coal prices began to fall, in mid-April ushered in a wave of large coal enterprises outside the purchase price to make up for the decline, when Q5500 power coal port price to test the thousand dollar mark, and then in late May coal prices down again, back down to within the price limit range. From the data, coal inland 17 provinces + coastal 8 provinces terminal inventory combined hit a new high since 2019, high supply, high inventory and pessimistic expectations for the subsequent demand strength triggered an accelerated decline in coal prices.
As of June 6, inland + coastal coal daily consumption is in the promotion stage, peak summer small peak season to certain demand support, in addition to some ports to fill back the previous empty order goods also drive part of the demand; pit mouth, it is reported that due to the top warehouse problem appeared to reduce production, supply and demand marginal signs of easing, coal prices stage stabilization momentum. For methanol, due to the characteristics of China's energy structure, coal-based methanol accounts for more than 75%, coal plays a dominant role in the raw material side. This year in the methanol industry chain profit repair stage, the upstream concessions downstream, methanol close to the cost line running mainly. And at the end of May, the methanol plate accelerated downward, from the marginal cost perspective looks like there are early trading coal price downward expectations, so the subsequent coal price trend on methanol gradually fade. In the medium and long term, coal prices are still weak under the potential import impact caused by domestic oversupply and overseas energy prices falling back, which will continue to form a "drag" effect on methanol.
Port inventory pressure is still expected
From the supply side, methanol overhaul strength has slowed down in May compared with April, and supply pressure may increase due to restart of some large volume units such as Jiutai and Baofeng. Due to the accelerated decline in methanol prices, and coal prices have compensated for the decline, coal-based methanol profit estimation pressure is substantially limited; however, the gas head loss is deeper. Previously rumored that the gas head device due to profit pressure appeared to focus on the possibility of negative reduction, the current view is more in the mood to bring more positive imagination, the actual disturbance is limited.
The biggest change on the demand side is the obvious repair of overall profits. Traditional downstream overall profit improvement, but some varieties of divergence; weighted after the start rate to maintain the normal level of the same period in the past five years. In terms of MTO, despite the low year-over-year start-up rate, the actual external methanol-to-olefin extraction gave support to port demand. Recently, along with the MTO device profit ring repair, device disturbance news is frequent. It is reported that Lucy Chemical MTO downstream unit has been driven, and methanol long contract shipments from Northwest part to Lucy resumed, with production scheduled to resume in early June. Centaline ethylene 200,000 tons long stop device has restarted production, because of the low stock of preparation has been tendered to purchase methanol. Xingxing 690,000 tons unit is still in normal operation at the moment, but may have a two-week maintenance stop during the month. Shenghong Srbang is rumored to have restart possibility, pending further tracking. In the short term, the news that some MTOs are restarting brings positive demand stimulus, but the MTO side may turn negative again under the pressure of Xingxing's parking and Srbang's still parking. And in the medium and long term, it is difficult to sustain MTO to support methanol.
The port pressure is high, mainly due to the impact of overseas sources. South China port inventory accumulated to a record high level, East China in the table demand is still available and poor unloading port performance for short-term depot. However, it is estimated that June is likely to continue the momentum of accumulation, from the Iranian sources of shipping estimates, the impact of imports in June or weaker than in May. In addition, the recent Iranian device fluctuations, so in the medium term, although the port inventory of methanol to maintain cumulative expectations, but should not be overly bearish.
Short-term coal impact or weakening
Comparing coal and methanol prices after the holidays, the two trends are similar, and the market outbreak nodes basically coincide. From the beginning of February coal prices began to fall, in mid-April ushered in a wave of large coal enterprises outside the purchase price to make up for the decline, when Q5500 power coal port price to test the thousand dollar mark, and then in late May coal prices down again, back down to within the price limit range. From the data, coal inland 17 provinces + coastal 8 provinces terminal inventory combined hit a new high since 2019, high supply, high inventory and pessimistic expectations for the subsequent demand strength triggered an accelerated decline in coal prices.
As of June 6, inland + coastal coal daily consumption is in the promotion stage, peak summer small peak season to certain demand support, in addition to some ports to fill back the previous empty order goods also drive part of the demand; pit mouth, it is reported that due to the top warehouse problem appeared to reduce production, supply and demand marginal signs of easing, coal prices stage stabilization momentum. For methanol, due to the characteristics of China's energy structure, coal-based methanol accounts for more than 75%, coal plays a dominant role in the raw material side. This year in the methanol industry chain profit repair stage, the upstream concessions downstream, methanol close to the cost line running mainly. And at the end of May, the methanol plate accelerated downward, from the marginal cost perspective looks like there are early trading coal price downward expectations, so the subsequent coal price trend on methanol gradually fade. In the medium and long term, coal prices are still weak under the potential import impact caused by domestic oversupply and overseas energy prices falling back, which will continue to form a "drag" effect on methanol.
Port inventory pressure is still expected
From the supply side, methanol overhaul strength has slowed down in May compared with April, and supply pressure may increase due to restart of some large volume units such as Jiutai and Baofeng. Due to the accelerated decline in methanol prices, and coal prices have compensated for the decline, coal-based methanol profit estimation pressure is substantially limited; however, the gas head loss is deeper. Previously rumored that the gas head device due to profit pressure appeared to focus on the possibility of negative reduction, the current view is more in the mood to bring more positive imagination, the actual disturbance is limited.
The biggest change on the demand side is the obvious repair of overall profits. Traditional downstream overall profit improvement, but some varieties of divergence; weighted after the start rate to maintain the normal level of the same period in the past five years. In terms of MTO, despite the low year-over-year start-up rate, the actual external methanol-to-olefin extraction gave support to port demand. Recently, along with the MTO device profit ring repair, device disturbance news is frequent. It is reported that Lucy Chemical MTO downstream unit has been driven, and methanol long contract shipments from Northwest part to Lucy resumed, with production scheduled to resume in early June. Centaline ethylene 200,000 tons long stop device has restarted production, because of the low stock of preparation has been tendered to purchase methanol. Xingxing 690,000 tons unit is still in normal operation at the moment, but may have a two-week maintenance stop during the month. Shenghong Srbang is rumored to have restart possibility, pending further tracking. In the short term, the news that some MTOs are restarting brings positive demand stimulus, but the MTO side may turn negative again under the pressure of Xingxing's parking and Srbang's still parking. And in the medium and long term, it is difficult to sustain MTO to support methanol.
The port pressure is high, mainly due to the impact of overseas sources. South China port inventory accumulated to a record high level, East China in the table demand is still available and poor unloading port performance for short-term depot. However, it is estimated that June is likely to continue the momentum of accumulation, from the Iranian sources of shipping estimates, the impact of imports in June or weaker than in May. In addition, the recent Iranian device fluctuations, so in the medium term, although the port inventory of methanol to maintain cumulative expectations, but should not be overly bearish.
In summary, after the coal price adjustment, the coal end of the disturbance tends to weaken, methanol short-term own supply and demand contradictions temporarily see can not drive a new round of down market, but in the port accumulation of expected pressure on the methanol space above is also limited.
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