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Methanol is not driven by itself. It fluctuates more with the overall commodity sentiment.
2023/6/25
Outlook: the near-end supply in the third quarter to maintain a high level, the demand is weaker, short-term supply increase under the demand flat, is expected to accelerate the bottom of the fundamentals, but the plate has been priced, the overall view of the contradiction is limited.
Outlook: from the fundamentals of the near end of the supply increase demand flat more obvious, supply exceeds demand under the inventory is expected to gradually accumulate, the contradiction is expanding, so the spot end is expected to still not bottom out, down there is still some space. But from the plate valuation, one is the stabilization of the cost side + macro policy bottoming, the second is for the reality of the weakening there is part of the valuation, so it is expected that even if the spot accelerates bottoming, the decline in the plate will be less than the spot.
Strategy: unilateral range oscillation, it is recommended to wait and see; 9-1 month difference to reverse set; PP-3MA wait and see.
Risk: macro disturbance risk, coal prices fluctuate significantly, etc.
【2Q Review】
2023 second quarter methanol unilateral decline, cost side + fundamental resonance weakness
(1) Post Spring Festival recovery expectations fell short, commodities fell, overlaid with high coal inventory contradictions, methanol fell back to high levels.
(2)After the rapid decline of coal, affected by the mining disaster, rapid rebound, methanol stage bottoming.
(3) Coal inventories continue to accumulate at high levels, the cost side of the contradictions amplified, while methanol itself is expected to be suppressed by high import pressure in the second quarter.
【Third quarter supply outlook: profit repair, low supply return】
Second quarter coal under high inventory pressure, the pivot continues to move down, the port and pithead are down to near the LTA price.
June to August is expected to high temperatures, daily consumption will be higher, inventory is expected to high seasonal de-stocking. But because this year's power plant inventory is higher than in previous years, unless the daily consumption exceeds expectations, it is difficult to have a significant rebound in absolute prices, and need to pay attention to the end of the peak demand season in July-August, the high inventory of power plants will be early price cuts to storage.
In the second quarter, new installations were put into operation as expected, with a total of 2.78 million tons put into operation, including 2.4 million tons/year of Baofeng put into operation near mid-April, with daily production of refined alcohol near 4,000 tons.
At present, the production in the third quarter may exceed expectations, and it is expected that 3.02 million tons of units will be put into operation before the 09 contract, most of which are coke oven gas and are concentrated in June-July.
In the past two years, the domestic methanol capacity growth rate has declined significantly, but from the process type, the proportion of coke oven gas is increasing, which is also from the coal system poorer profits, resulting in the coal system new production capacity put into operation less, although the coal system put into operation a single set of scale is still large, but most of the supporting downstream, and coke oven gas production costs are much lower than the coal system, so there is some pressure on the coal system capacity.
Spring inspection background, the second quarter of the domestic stock of devices to maintain a low start rate, the average start rate of about 66% in April-May. This year, although coal fell, upstream profits have been repaired, but the spring inspection is still strong, so that the second quarter supply remains low.
In the second quarter, coal prices continued to fall under high inventory, overlaid with methanol spring inspection supply contraction, coal profits gradually repaired.
We expect that in the near end of the third quarter, due to high upstream profits and the end of the spring inspection, supply will gradually return under this profit level. However, due to limited demand in the off-season, it is expected that profits will continue to be compressed after the return of supply until there is negative feedback on the supply side.
Currently, a DiPolymerArianPetro 1.65 million tons/year plant in Iran was ignited near March 20, and the progress of its mid-year production is concerned.
Iranian imports picked up in the second quarter from May, with imports maintaining a high level around 700,000 tons in May-June. But recently, as Iran began to negotiate the third quarter long contract plus points, so the start-up rate fell significantly, at present, ZPC a set of 1.65 million tons / year, Kaveh 2.3 million tons / year, Busher 1.65 million tons / year parking, is expected to reduce imports in the third quarter compared with the second quarter, but the magnitude may be relatively limited, specific attention to the Iranian point of negotiation.
In the second quarter, overseas natural gas prices remained low and oscillating, natural gas to methanol profits remained at a mid-history level, and overall non-Iranian starts remained at a medium-high level, while imports also remained high in the second quarter. It is expected that some of the non-Iranian units in the third quarter will start to work back due to seasonal maintenance, but we need to pay attention to the impact of high profit on the actual maintenance.
【Three quarter demand outlook: mto demand faces marginal phase-out】
The demand for methanol in the second quarter of 2023 remained weak, and the integrated downstream start-up rate continued to remain low year-on-year. Specifically, the average MTO start rate from April to June was 78%, down 5 percentage points year-on-year; the average traditional downstream start rate from April to June was 43%, basically flat year-on-year.
In the second quarter, affected by the fall of coal, the profit of coal chemical industry chain obviously shifted from the raw material side to the downstream, and the profit of MTO continued to be repaired, but still at a historical low.
In the third quarter, considering the gradual return of short-term methanol upstream supply, profits will be transferred to the downstream, and the recent high level of MTO profits can still be maintained, but it is expected that with the gradual occurrence of negative feedback after the oversupply of methanol, it is more difficult to maintain strong profits at the MTO end in the long term.
At present, there are three sets of device maintenance in the port and the mainland, of which 800,000 tons/year of port Searborn is expected to return in the third quarter, while 690,000 tons/year of Zhejiang Xingxing is expected. In addition, the mainland Lucy Chemical 300,000 tons / year has not restarted.
Traditional downstream starts in the second quarter to maintain about 40% of the average value of the nearby, little change. It is expected that the traditional downstream demand in the third quarter to maintain a median level of about 45%, can pay attention to the golden ninth and silver tenth peak season expectations can be realized.
【Balance sheet】
Balance sheet assumptions: new devices, June 14 Xuzhou Long Xingtai 300,000 tons, June 19 Shanxi Terrier Yang 300,000 tons, July 1 Inner Mongolia Humeng 400,000 tons, Inner Mongolia Guangju 600,000 tons (all to half load); MTO device, Zhejiang Xingxing 690,000 tons / year on June 19 parking a month, Lucy Chemical 300,000 tons / year June 20 drive, Shenghong continue to stop.
Outlook: from the fundamentals of the near end of the supply increase demand flat more obvious, supply exceeds demand under the inventory is expected to gradually accumulate, the contradiction is expanding, so the spot end is expected to still not bottom out, down there is still some space. But from the plate valuation, one is the stabilization of the cost side + macro policy bottoming, the second is for the reality of the weakening there is part of the valuation, so it is expected that even if the spot accelerates bottoming, the decline in the plate will be less than the spot.
Overall, methanol (2075,7.00,0.34%) contradictions are very limited, as methanol prices are accompanied by a simultaneous decline in the coal end, so the supply side did not see negative feedback, and the demand side did not see a significant increase in its own drive is insufficient, more with the overall commodity sentiment fluctuations.
Strategy: unilateral range oscillation, it is recommended to wait and see; 9-1 month difference to reverse set; PP-3MA wait and see.
Risk: macro disturbance risk, coal prices fluctuate significantly, etc.
【2Q Review】
2023 second quarter methanol unilateral decline, cost side + fundamental resonance weakness
(1) Post Spring Festival recovery expectations fell short, commodities fell, overlaid with high coal inventory contradictions, methanol fell back to high levels.
(2)After the rapid decline of coal, affected by the mining disaster, rapid rebound, methanol stage bottoming.
(3) Coal inventories continue to accumulate at high levels, the cost side of the contradictions amplified, while methanol itself is expected to be suppressed by high import pressure in the second quarter.
【Third quarter supply outlook: profit repair, low supply return】
Second quarter coal under high inventory pressure, the pivot continues to move down, the port and pithead are down to near the LTA price.
June to August is expected to high temperatures, daily consumption will be higher, inventory is expected to high seasonal de-stocking. But because this year's power plant inventory is higher than in previous years, unless the daily consumption exceeds expectations, it is difficult to have a significant rebound in absolute prices, and need to pay attention to the end of the peak demand season in July-August, the high inventory of power plants will be early price cuts to storage.
In the second quarter, new installations were put into operation as expected, with a total of 2.78 million tons put into operation, including 2.4 million tons/year of Baofeng put into operation near mid-April, with daily production of refined alcohol near 4,000 tons.
At present, the production in the third quarter may exceed expectations, and it is expected that 3.02 million tons of units will be put into operation before the 09 contract, most of which are coke oven gas and are concentrated in June-July.
In the past two years, the domestic methanol capacity growth rate has declined significantly, but from the process type, the proportion of coke oven gas is increasing, which is also from the coal system poorer profits, resulting in the coal system new production capacity put into operation less, although the coal system put into operation a single set of scale is still large, but most of the supporting downstream, and coke oven gas production costs are much lower than the coal system, so there is some pressure on the coal system capacity.
Spring inspection background, the second quarter of the domestic stock of devices to maintain a low start rate, the average start rate of about 66% in April-May. This year, although coal fell, upstream profits have been repaired, but the spring inspection is still strong, so that the second quarter supply remains low.
In the second quarter, coal prices continued to fall under high inventory, overlaid with methanol spring inspection supply contraction, coal profits gradually repaired.
We expect that in the near end of the third quarter, due to high upstream profits and the end of the spring inspection, supply will gradually return under this profit level. However, due to limited demand in the off-season, it is expected that profits will continue to be compressed after the return of supply until there is negative feedback on the supply side.
Currently, a DiPolymerArianPetro 1.65 million tons/year plant in Iran was ignited near March 20, and the progress of its mid-year production is concerned.
Iranian imports picked up in the second quarter from May, with imports maintaining a high level around 700,000 tons in May-June. But recently, as Iran began to negotiate the third quarter long contract plus points, so the start-up rate fell significantly, at present, ZPC a set of 1.65 million tons / year, Kaveh 2.3 million tons / year, Busher 1.65 million tons / year parking, is expected to reduce imports in the third quarter compared with the second quarter, but the magnitude may be relatively limited, specific attention to the Iranian point of negotiation.
In the second quarter, overseas natural gas prices remained low and oscillating, natural gas to methanol profits remained at a mid-history level, and overall non-Iranian starts remained at a medium-high level, while imports also remained high in the second quarter. It is expected that some of the non-Iranian units in the third quarter will start to work back due to seasonal maintenance, but we need to pay attention to the impact of high profit on the actual maintenance.
【Three quarter demand outlook: mto demand faces marginal phase-out】
The demand for methanol in the second quarter of 2023 remained weak, and the integrated downstream start-up rate continued to remain low year-on-year. Specifically, the average MTO start rate from April to June was 78%, down 5 percentage points year-on-year; the average traditional downstream start rate from April to June was 43%, basically flat year-on-year.
In the second quarter, affected by the fall of coal, the profit of coal chemical industry chain obviously shifted from the raw material side to the downstream, and the profit of MTO continued to be repaired, but still at a historical low.
In the third quarter, considering the gradual return of short-term methanol upstream supply, profits will be transferred to the downstream, and the recent high level of MTO profits can still be maintained, but it is expected that with the gradual occurrence of negative feedback after the oversupply of methanol, it is more difficult to maintain strong profits at the MTO end in the long term.
At present, there are three sets of device maintenance in the port and the mainland, of which 800,000 tons/year of port Searborn is expected to return in the third quarter, while 690,000 tons/year of Zhejiang Xingxing is expected. In addition, the mainland Lucy Chemical 300,000 tons / year has not restarted.
Traditional downstream starts in the second quarter to maintain about 40% of the average value of the nearby, little change. It is expected that the traditional downstream demand in the third quarter to maintain a median level of about 45%, can pay attention to the golden ninth and silver tenth peak season expectations can be realized.
【Balance sheet】
Balance sheet assumptions: new devices, June 14 Xuzhou Long Xingtai 300,000 tons, June 19 Shanxi Terrier Yang 300,000 tons, July 1 Inner Mongolia Humeng 400,000 tons, Inner Mongolia Guangju 600,000 tons (all to half load); MTO device, Zhejiang Xingxing 690,000 tons / year on June 19 parking a month, Lucy Chemical 300,000 tons / year June 20 drive, Shenghong continue to stop.
Strategy, is expected to be weak near far strong, but taking into account the coal and macro policy bottoming, unilateral wait and see, the structure of the inverse set mainly, PP-3MA do shrink.
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