Industry News
Recently, the supply and demand of methanol have been booming, and the overall performance of methanol is good
Feng Bing, an analyst at Donghai Futures Energy Chemical, told reporters that the national operating rate of methanol has increased from around 64% at the end of July to over 73% at present, with an upward trend of nearly 10 percentage points, and imports remain high, gradually highlighting supply side pressure. However, based on MTO statistical data, the downstream operating rate has increased by about 7 percentage points, while the increase in other downstream operating rates is limited. This has led to the national methanol inventory rising to a neutral high level in the past month, with port inventory reaching a high of 1.2 million tons. Especially, the overall circulating inventory of the port is about 550000 tons, which is a new high in the past 7 years, putting some pressure on methanol prices.
However, the performance of methanol varies across regions, with port areas being constrained by continuous high imports, inventory accumulation, and weak price trends. In the mainland, due to downstream stocking before the Mid Autumn Festival and National Day holidays, the price trend is relatively strong. "said Yu Sen, leader of the energy and chemical group of Qisheng Futures.
In fact, the overall performance of methanol fundamentals has been good recently. According to Yu Sen, on the supply side, after undergoing large-scale maintenance in the early stage, supply in mainland China has continued to be insufficient, inventory has decreased, prices have increased, profits have gradually recovered, and operating rates have also gradually increased, basically returning to the high level of annual operation. On the demand side, the operating rates of formaldehyde, acetic acid, and MTBE have all reached the highest level in history in the same period in nearly 5 years, while traditional downstream demand has shown strong performance. According to third-party information agencies, as of last Friday, the domestic formaldehyde operating rate was 32.92%, an increase of 0.09 percentage points compared to last week, reaching a new high in at least five years of history; The operating rate of acetic acid is 85.47%, an increase of 2.62 percentage points compared to last week, which is at a historical high in the same period in the past five years; The domestic MTBE operating rate is 62.08%, an increase of 2.5 percentage points compared to the previous week, setting a new historical high for at least 6 years. The methanol to olefin unit is basically unchanged from the same period last year, and with the commissioning of the Baofeng new unit and the expected completion of maintenance at Tianjin Bohai Chemical, there is still a possibility of further increase in methanol to olefin production capacity in the future.
From a macro perspective, the year-on-year PMI and PPI indicators of manufacturing in China, the United States, and Europe are currently at low levels, and there has not been a trend reversal. Interest rates in the United States and the eurozone continue to be high, and the timing for switching to a rate cutting cycle is not yet ripe. The overall tightening external environment has not changed, and demand contraction pressure still exists, "added Chen Miao, an analyst at Haitong Futures Energy.
Looking ahead to the future, Yu Sen stated that currently, domestic methanol is in a rare period of supply and demand, with the start of methanol plants reaching a historic high during the same period. However, demand is also strong, and inventory in mainland China is still declining. Coupled with the continuous oscillation and rise of basic raw materials such as crude oil and coal, the market is showing a trend of both quantity and price. Due to the ongoing preparation of goods during the "Double Festival" period, most mainland enterprises have already digested their inventory. Currently, contract orders are mostly sold until the end of the month, and some enterprises have pre-sale their production during the "Double Festival" period. There is no significant short-term pressure in mainland China. However, the inventory and saleable inventory in the port area are relatively high, and there is still uncertainty in post holiday demand. Once there is a large-scale sell-off, it will create significant pressure on the market, and there is still a possibility of a decline in crude oil prices, increasing market uncertainty.
In Chen Miao's view, with a slight increase in methanol profits in Inner Mongolia, the operating rate of enterprises has significantly increased, and the supply has increased. Currently, the operating rate of coal to methanol is at a high level in the same period last year, and it is expected that there is limited room for the increase in methanol profits in Inner Mongolia. Since May, the import volume of methanol has remained at a high level, and the decrease in import volume is expected to wait until the fourth quarter. Port inventory will remain at a high level in the short term.
Feng Bing believes that the recent strengthening of the cost side has given some support to the unilateral price of the methanol futures 2401 contract, and the traditional downstream peak season construction of the "Golden Nine Silver Ten" has continued to increase expectations. In addition, the 1 million ton/year MTO device of Baofeng Phase III in Ningxia was launched on September 12th, and Xingxing Energy's 690000 ton/year device is ready to restart. If the device is stable and fulfilled, it is expected that the inventory pressure will be reduced under the pull of the demand side, especially in the current process of collective increase in energy and chemical commodity valuation, where the unilateral price of methanol remains relatively strong. In the medium to long term, the seasonal supply tightening caused by domestic and international natural gas restrictions in the fourth quarter is expected to be stronger, making far month contracts still a viable option.
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