China’s methanol imports surged in February

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China’s Methanol Imports Soared in February Author/Source: Longzhong Petrochemical Business Network Date: 2009-4-2 -------------------------------------------------------------------------------- According to the latest statistics from Chinese customs, China’s methanol imports surged to 591,222 tons in February. Market analysts say this figure represents the highest monthly level for China’s methanol imports that Platts has recorded since it began tracking such data in 2000, and it is also the third consecutive month in which such high levels have been seen. Previous records showed imports of 403,406 tons in January 2009 and 361,670 tons in December 2008; prior to that, China imported 211,156 tons of methanol in January 2001. In 2008, China imported a total of 1.43 million tons of methanol, an increase of 70% compared to 2007. Compared to the 19,897 tons imported in February 2008, imports surged by 2,876%. In February 2009, the largest source of methanol imports was Saudi Arabia, with a volume of 261,380 tons. Next is Iran (68,930 tons), followed by Oman (64,535 tons), Malaysia (56,416 tons), Qatar (48,663 tons), New Zealand (42,442 tons), and Chile (35,008 tons). In February 2009, the average spot price of methanol in China was the highest in Asia, at 193.30–194.55 USD/ton; the price in South Korea was 186.75–187.75 USD/ton, while in Southeast Asia it was 162.50–164.25 USD/ton. At the end of last year, China’s methanol imports surged due to the shutdown of methanol production facilities with capacities of 12 to 14 million tons per year. Since November last year, many smaller and medium-sized plants have closed down as their profitability declined, resulting in average operating rates of only 50% and 70%. There are nearly 200 methanol production plants in our country, many of which are small in scale and use coal as raw material. Abroad, methanol production almost always uses natural gas as a raw material, and the cost is usually lower than that using coal as a raw material. Since the end of October last year, the domestic ex-plant price of methanol has been below 2,000 RMB per ton (or equivalent to an average import price of 230 USD per ton). Many domestic producers have been forced to significantly reduce their production levels or shut down altogether, as they need a methanol price of 2,000–2,500 RMB per ton in order to achieve sufficient profits. However, the benchmark price in the domestic eastern market currently ranges between 1,975 and 2,000 RMB per ton. Although domestic prices have risen, they still remain unattractive for many producers to increase their methanol production.