Recent analysis of the methanol market: Tight supply conditions will persist, and the market is likely to remain in a range with upward trends【Reposted】

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Increasing demand for heating using coal and natural gas has led to a shortage of raw materials for methanol manufacturers, forcing their plants to operate at reduced capacity. With the reform of natural gas prices approaching and coal prices also rising, these factors lead to increased costs for downstream products such as methanol and dimethyl ether, resulting in a clear expectation of rising costs for enterprises. Strong demand in the downstream dimethyl ether market has driven the price of methanol to its highest level yet this year. However, as prices rose too rapidly and became too high, buyers’ willingness to purchase decreased, which may slow down the upward trend in the market. Nevertheless, imports will remain low, natural gas supply remains tight, and supply issues for production facilities persist; thus, there is still room for further increases in methanol prices in the future. In the next 1-2 months, if domestic prices exceed 2,500 yuan per ton, almost all methanol manufacturers in China will be profitable and may increase their production levels or resume operations; as a result, supply will rise. Additionally, with the Spring Festival coming in February, traders may want to clear their inventories, which could lead to a slowdown in the formaldehyde market. There is a possibility of a decline in prices, but the extent of such a decline will likely be limited.