Recent characteristics of coastal methanol: weak, changing, chaotic

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This article is reprinted from HuiCong Network by Global Chemical Port. I. Weak market conditions: In March, domestic methanol trading was generally weak, with limited investment opportunities; the price remained within a narrow range of 2850–2930 yuan. Demand failed to materialize as expected. Dimethyl ether, formaldehyde, and acetic acid faced pressures stemming from both macroeconomic policies and imbalances in their own supply and demand situations, resulting in less rigid demand compared to previous years, and thus no sustained consumption of these raw materials as in earlier times. Futures prices, on the other hand, have remained within the 2900–3000 range, showing a relatively stable trend. This state of consolidation has persisted for over a month, with frequent fluctuations up and down, prompting traders to be more cautious and hesitant in their actions. Therefore, daily demand is primarily driven by speculative factors; buyer interest is uneven, with many attempts to test the market, and transactions usually occur in the form of small, individual orders, while large-scale transactions are extremely rare. II. The erratic fluctuations in methanol prices, along with the volatile movements in crude oil prices, are greatly affecting merchants’ confidence in investing. While these chaotic price trends provide short-term opportunities for speculators, they also cause confusion and uncertainty regarding price determination for physical traders and hedgers. Complaints from physical traders are constant, and losses among hedgers keep occurring. III. Changes: Due to the sluggish market conditions, in order to hedge against risks in advance, some importers prefer to collect payment first and then deliver the goods, so as to ensure security for their funds. Or carry out cross-arbitrage between spot and futures; for example, when there is a price difference of 50-80 yuan between the spot price and the futures price today, one should actively buy the spot assets after April 10th to take advantage of arbitrage opportunities. It is something we should always keep in mind: to plan ahead and to consider making changes when in difficulty. In summary, with high costs and weak demand, the methanol market does not have the prerequisites for a rise or a sharp drop; it is difficult for prices to increase as well as to fall. Maintaining a stalemate in the short term is the rational choice. But from a technical perspective, there is still momentum for a rebound around 2,850–2,860 yuan, with significant support from costs. From a fundamental perspective, the overall supply and demand balance has not changed much, with spot prices remaining in the range of 2850–2920. Driven by funding, futures can also see price increases, and it is not ruled out that they may continue to rise toward the significant resistance level of 3000 in the future.