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Methanol will maintain a weak trend due to fundamental suppression
2023/6/16
At present, the domestic production increase is limited, and short-term supply pressure is still available. However, in the peripheral market, plant starts continue to increase and production continues to spill over. Overall, suppressed by the fundamentals, methanol will maintain a weak operation.
Recently, on the one hand, imported shipments are concentrated in the port to unload, coastal inventory rose significantly, with the new domestic production capacity solidly put, overhaul devices gradually resume operation, the market after the methanol supply is expected to increase steadily; on the other hand, raw material coal prices remain weak, the cost of methanol has loosened.
External device starts increase
From the supply side, the current domestic supply is still under short-term pressure, and the market is expected to increase steadily in the future. With the commissioning of large domestic units in the main production areas, domestic methanol production capacity has reached a new high, and the market has expectations of an increase in domestic supply. However, there are still more seasonal or phased stopping and maintenance installations this month, and methanol starts are not fully restored for the time being. Data show that as of June 8, the overall domestic methanol plant start-up load was 65.88%, up 0.81 percentage points, down 7.88 percentage points compared with the same period last year; the start-up load in Northwest China was 71.99%, up 2.29 percentage points, down 14.34 percentage points compared with the same period last year. Domestic production growth is limited, short-term supply pressure is still available.
On the international supply side, with the concentration of imported shipments to the port unloading, the peripheral market supply pressure gradually accumulated. Device starts continue to move up, the long contract stable delivery, while demand in Europe and the United States is weak, production continues to spill over. China's coastal import shipments to port unloading significantly increased, according to the ship schedule, is expected to May methanol imports in 1.2 million - 1.4 million tons, the peripheral market supply pressure gradually accumulated. Performance to the port inventory, the recent import ships focus on unloading into storage, the arrival of a significant increase. As of June 8 week, the coastal methanol inventory was 874,000 tons, up about 10%, the estimated methanol liquidity in coastal areas is 294,000 tons, Jiangsu inventory rose significantly. June import ship arrival forecast also remains high, is expected in the second half of the Chinese import ship arrivals in 840,000 tons, the port spot weak loosening, basis difference weakened to about 40 yuan / ton.
Traditional downstream weakness is difficult to change
On the one hand, international natural gas prices are oscillating in the bottom range of history, natural gas as the main raw material for international methanol production, international methanol import cost is around 1370 yuan/ton, international methanol import cost continues to be low. On the other hand, coal prices remain weak, and the cost support line for methanol moves down. The raw material coal inventory is high and the price continues to be weak, the market price of Q5500 calorie power coal in Ordos market is at 535580 yuan/ton, the theoretical cost of northwest coal to methanol drops to near 1950 yuan/ton, the loss of coal to methanol production is around 150 yuan/ton, dragging down the valuation of methanol. However, coal price has fallen to a reasonable range at present, and with the arrival of summer, coal price has peak season expectation, methanol cost line will stabilize.
From the demand side, with the continuous decline of methanol prices, most downstream production profits of methanol have been repaired to some extent, and the middle and lower reaches are picking up at low prices and just replenishing the storage. However, with the arrival of traditional downstream seasonal off-season, it is difficult to see significant improvement on the demand side. As of June 8, the overall downstream weighted start rate of methanol is about 69%, the traditional downstream weighted start rate is about 47%, the average start load of methanol to olefin plant is at 77.18%, of which the average load of external methanol MTO plant capacity is about 70.36%.
The theoretical profit of port olefins plant gradually went up and the loss gradually narrowed, however, the overall profitability is still general, the enthusiasm of starting work is not high, and some of the plants are under long-term maintenance. At present, Shaanxi Pucheng 700kt/year MTO plant and Yang Coal Hengtong 300kt/year restart one after another, Ningbo Fude 600kt/year and Changzhou Fude 300kt/year have low load, and Srbang is still in the process of stopping for maintenance, and restart is expected later. Xingxing Energy is currently running steadily, and the market expects that its device has the possibility to reduce the negative, if at the same time sell out raw materials, it will drag down the demand for methanol, and pay attention to the progress of the methanol-to-olefin device for coastal off-take.
Recently, on the one hand, imported shipments are concentrated in the port to unload, coastal inventory rose significantly, with the new domestic production capacity solidly put, overhaul devices gradually resume operation, the market after the methanol supply is expected to increase steadily; on the other hand, raw material coal prices remain weak, the cost of methanol has loosened.
External device starts increase
From the supply side, the current domestic supply is still under short-term pressure, and the market is expected to increase steadily in the future. With the commissioning of large domestic units in the main production areas, domestic methanol production capacity has reached a new high, and the market has expectations of an increase in domestic supply. However, there are still more seasonal or phased stopping and maintenance installations this month, and methanol starts are not fully restored for the time being. Data show that as of June 8, the overall domestic methanol plant start-up load was 65.88%, up 0.81 percentage points, down 7.88 percentage points compared with the same period last year; the start-up load in Northwest China was 71.99%, up 2.29 percentage points, down 14.34 percentage points compared with the same period last year. Domestic production growth is limited, short-term supply pressure is still available.
On the international supply side, with the concentration of imported shipments to the port unloading, the peripheral market supply pressure gradually accumulated. Device starts continue to move up, the long contract stable delivery, while demand in Europe and the United States is weak, production continues to spill over. China's coastal import shipments to port unloading significantly increased, according to the ship schedule, is expected to May methanol imports in 1.2 million - 1.4 million tons, the peripheral market supply pressure gradually accumulated. Performance to the port inventory, the recent import ships focus on unloading into storage, the arrival of a significant increase. As of June 8 week, the coastal methanol inventory was 874,000 tons, up about 10%, the estimated methanol liquidity in coastal areas is 294,000 tons, Jiangsu inventory rose significantly. June import ship arrival forecast also remains high, is expected in the second half of the Chinese import ship arrivals in 840,000 tons, the port spot weak loosening, basis difference weakened to about 40 yuan / ton.
Traditional downstream weakness is difficult to change
On the one hand, international natural gas prices are oscillating in the bottom range of history, natural gas as the main raw material for international methanol production, international methanol import cost is around 1370 yuan/ton, international methanol import cost continues to be low. On the other hand, coal prices remain weak, and the cost support line for methanol moves down. The raw material coal inventory is high and the price continues to be weak, the market price of Q5500 calorie power coal in Ordos market is at 535580 yuan/ton, the theoretical cost of northwest coal to methanol drops to near 1950 yuan/ton, the loss of coal to methanol production is around 150 yuan/ton, dragging down the valuation of methanol. However, coal price has fallen to a reasonable range at present, and with the arrival of summer, coal price has peak season expectation, methanol cost line will stabilize.
From the demand side, with the continuous decline of methanol prices, most downstream production profits of methanol have been repaired to some extent, and the middle and lower reaches are picking up at low prices and just replenishing the storage. However, with the arrival of traditional downstream seasonal off-season, it is difficult to see significant improvement on the demand side. As of June 8, the overall downstream weighted start rate of methanol is about 69%, the traditional downstream weighted start rate is about 47%, the average start load of methanol to olefin plant is at 77.18%, of which the average load of external methanol MTO plant capacity is about 70.36%.
The theoretical profit of port olefins plant gradually went up and the loss gradually narrowed, however, the overall profitability is still general, the enthusiasm of starting work is not high, and some of the plants are under long-term maintenance. At present, Shaanxi Pucheng 700kt/year MTO plant and Yang Coal Hengtong 300kt/year restart one after another, Ningbo Fude 600kt/year and Changzhou Fude 300kt/year have low load, and Srbang is still in the process of stopping for maintenance, and restart is expected later. Xingxing Energy is currently running steadily, and the market expects that its device has the possibility to reduce the negative, if at the same time sell out raw materials, it will drag down the demand for methanol, and pay attention to the progress of the methanol-to-olefin device for coastal off-take.
In summary, from the fundamental point of view, the supply pressure in the peripheral market increases, the restart of MTO plant is delayed, the traditional downstream continues to be weak in the near future, and there is no favorable demand side for the time being, so methanol will maintain a weak operation.
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