Methanol market maintains high operating trend

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　Recently, under the continued influence of geopolitical conflicts, the domestic methanol market has experienced violent fluctuations. Futures and spot prices have risen sharply simultaneously, hitting new highs in recent years. As of May 7, the domestic mainstream transaction price still remains at around 3,100 yuan (ton price, the same below), which has been stable at a high level for more than a month. Among them, the price in Taicang, Jiangsu was 3,270 yuan. In April, the price even exceeded 3,600 yuan, a sharp increase of more than 47% from the beginning of March. 　　“This round of market conditions is mainly driven by a sharp decline in overseas supply, domestic destocking, and recovery in downstream demand. At the same time, there is strong support from the cost side. The methanol market as a whole shows operating characteristics of lack of strong supply expectations, strong support from rigid demand, and prominent price elasticity. ”Senior market commentator Shao Huiwen said. 　　Overseas supply has dropped sharply. Shao Huiwen said that overseas markets are the core trigger of this round of methanol market. The geopolitical situation in the Middle East continues to be disturbed, coupled with the sudden force majeure of the Saudi methanol plant, the overseas methanol export supply has tightened significantly. Customs statistics show that methanol imports in March were 437,900 tons, a month-on-month decrease of 50.5%. There is a serious shortage of imported goods, which directly breaks the balance of supply and demand in the domestic market. This is also one of the main factors that triggered the continued rise in prices starting in March. 　　The domestic supply side also shows a tight situation. In April, the national methanol operating rate remained at around 78%, a month-on-month decrease. Several methanol units in Shanxi Linxin, Yulin Yankuang, Shaanxi Black Cat, Northwest Energy, and Jiutaituo County have entered the spring maintenance period. The spot circulation in the production areas has tightened, the inventories of production companies are low, and there is a strong willingness to hold up prices but be reluctant to sell. Although coal-to-methanol is still profitable and companies are willing to start operations, the spring maintenance and new domestic methanol production capacity in the second quarter are limited, and the production capacity is only 700,000 tons. In the short term, domestic supply is difficult to increase quickly, and the supply side continues to form strong support for the market. 　　Domestic destocking According to an importer and exporter in Jiangsu, inventory data further confirms the tight supply and demand pattern of the methanol market, and port stocks have been significantly destocked. As of early April, the domestic methanol port sample inventory was 1.034 million tons, a month-on-month decrease of 121,500 tons, a decrease of more than 10%. Longzhong Information shows that port inventory has dropped to 922,000 tons in early May, a further 10.8% month-on-month decrease. ； Ports in East China and South China are destocking simultaneously. In the mainstream reservoir areas, under the dual support of downstream pickup and export arbitrage, inventories continue to decline, and the supply of goods in the market is tight. 　　The relevant person in charge of Henan Kaixiang Fine Chemical Co., Ltd. said that the international emergency situation has broken the methanol market pattern that was originally operating at a low level, and the supply of circulating goods continues to decline. The inventories of domestic manufacturers and traders are also at a low level, with no obvious accumulation pressure, and the inventory cycle continues to improve. In a low inventory environment, the market is easy to rise but difficult to fall. Even if the price rises and falls, it is difficult to fall sharply, providing solid support for the high operation of methanol prices. 　　Downstream demand is picking up. Meng Jianwei, head of Henan Ruiyuan New Energy Chemical Industry, said that in addition to the sharp decline in imported goods caused by unexpected factors and the continued destocking of ports, the downstream demand side is showing a differentiated recovery trend, which is also the key to boosting the market. Among them, methanol-to-olefins (MTO), as the main source of core demand, performed particularly well. With the restart of Shenghong MTO equipment, the operating rate of the domestic MTO industry has steadily recovered. As of the end of March, the operating rate of MTO units across the country reached 83.8%, and the operating rate of external methanol-to-olefin units was 78.3%. The profits of olefin units have gradually recovered, and the purchase volume of methanol has increased significantly, becoming the core force supporting the demand for methanol. 　　In other traditional downstream areas, formaldehyde, dimethyl ether, acetic acid and other industries have entered a seasonal recovery cycle, and operating rates have gradually increased. However, affected by the high price of methanol, the procurement costs of downstream companies have increased, production profits have been squeezed, and the overall demand side has shown a pattern of "strong core rigid demand and limited follow-up of traditional demand." 　　In addition, the heads of several methanol production companies said that the upstream cost side has continued to support the methanol market. International crude oil prices have remained high, and the cost of coal-to-methanol has been firmly supported. Production companies have limited room for price reductions. At the same time, fluctuations in overseas energy markets are transmitted to the methanol industry chain, coupled with rising shipping costs, further pushing up the cost of imported methanol. The cost side has also become an important factor that makes it difficult for methanol prices to fall back in the short term. 　　According to analysis by industry insiders, combined with the current international situation, the methanol market will still maintain a pattern of high and wide fluctuations and strong operation in the short term. Three core variables need to be focused on in the medium term: First, the geopolitical situation in the Middle East has evolved. After the geopolitical conflicts ease, the supply of imported goods will gradually return. ； The second is the change in the maintenance progress and operating rate of domestic methanol plants. If companies resume production intensively, domestic supply will increase rapidly. ； The third is the ability to undertake downstream demand. If methanol prices remain high and losses in the downstream industry intensify, demand will weaken further, which will drag down the methanol market.