Methanol: bottoming out, market recovery
2023/8/17
"Beginning in late June, the downstream market of methanol has gradually recovered, and the operating rate has increased to stimulate the demand for raw material methanol. At the same time, methanol companies have also been boosted by the continuous rise of raw coal. Rebound. In addition, the phased maintenance of some domestic methanol plants in June also led to a reduction in regional supply. Under the combined influence, the methanol market bottomed out a round of rebound in the middle of the year.
Based on the fact that the current upward momentum of the methanol market has been effectively released, and the subsequent upward momentum shows signs of weakness, it is expected that the methanol market outlook will be dominated by market recovery. "Shao Huiwen, a senior market commentator, said this.
Downstream demand grows steadily
According to statistics from SunSirs, as of late July, the comprehensive operating rate of major products such as methanol downstream methanol to olefins, formaldehyde, dimethyl ether, glacial acetic acid, methyl tert-butyl ether (MTBE), and methane chloride was 70.6%. Increased by 0.6%, especially the operating rate of glacial acetic acid increased by more than 12%, and the downstream demand showed a steady growth momentum.
Shao Huiwen said that in addition to the demand for methanol from traditional chemical products affecting the market, urea, a major downstream product of methanol, also plays an important role in stimulating the methanol market. Since mid-June, the urea market has continued to rise, and some units that have been shut down due to market downturn and corporate losses in the early stage have been started or increased production one after another, continuously increasing the demand for raw material methanol. It can be seen from the methanol market trend chart that it is basically positively correlated with the urea market.
Cost support helps rebound
Data show that since June, coal prices in various parts of the country have begun to rebound steadily. As of July 27, the price of Ordos pulverized coal Q5500 rose to 728 yuan, a month-on-month increase of more than 13%, forming high-cost support for coal-to-methanol enterprises.
Li Bing, a trader in Henan, said that under the background of continuously rising coal prices, coal-to-methanol enterprises in various parts of the country are forced to increase the price of methanol to absorb the cost pressure of continuous increase. However, the rebound of raw materials allowed methanol and its downstream manufacturers to see the possibility of a market reversal. Transactions began to be active, and the passive follow-up of raw materials was basically transmitted smoothly.
Methanol plant reduces burden and production
According to reports from enterprises in Inner Mongolia, Shaanxi, Henan and other places, there have been phased maintenance of methanol plants in many companies since late June, such as methanol plants in Inner Mongolia Yigao, Zhongan United, Shaanxi Huangling, and Henan Xinlianxin. As of mid-July, the comprehensive operating rate of major domestic methanol enterprises has dropped to about 73%, a month-on-month decrease of 3%, resulting in a decline in market supply, especially the reduction in the pure commodity volume of methanol.
The person in charge of the methanol project of Zhongyuan Futures said that the rise of the domestic methanol market since the middle and late June has a lot to do with the reduction of production by domestic methanol enterprises in June, especially the reduction of production in some major production areas can cause regional differences. degree of price increases. In addition, on the import side, the decline in import volume caused by the unstable operation of some foreign devices has also played a role in boosting the domestic market. It is expected that the arrival volume of methanol products in July will drop significantly compared with June, and it is estimated to be 1.1 million to 1.2 million Ton.
Domestically, according to the person in charge of sales of a chemical fertilizer company in Henan Energy Group, with the continuous rebound in methanol prices, the methanol plants that were shut down for maintenance in the early stage have recovery plans in August, such as Henan Energy's Sino-Singapore Chemical Industry Co., Ltd. 500,000 tons/year of methanol, 200,000 tons/year of Inner Mongolia Baotou Steel, 1 million tons/year of Inner Mongolia Yuanxing and other methanol plants, involving a production capacity of more than 2 million tons. If the downstream demand cannot be effectively increased, the methanol market will continue to rebound and face resistance. The methanol market does not rule out the possibility of reorganization in the short term.
According to the analysis of industry insiders, the current fundamentals of the methanol industry are not clearly driven, and the cost-side support has improved in the short term, but remains weak in the long term. The subsequent market trend may continue to be driven by factors such as macro and coal. The operating rate of downstream olefins determines the height above the market. . However, due to factors such as the lack of cost support to the downstream and the steady growth of downstream demand, the short-term methanol market may be mainly repaired. In the medium and long term, the methanol market is still promising.
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