Summary Post on the Methanol Market Conditions and Prices in April 2016

The rise in methanol prices has hit a snag; a correction is likely in the near term. http://www.chemcp.com April 1, 2016, China Chemical Products Network. In March, methanol futures prices rose sharply; the main contract MA1605 peaked at 2,075 yuan per ton. However, towards the end of March, methanol prices declined after encountering resistance. As of March 25, the price stood at 1,923 yuan per ton. The continuous rise in international crude oil prices at the beginning of March, along with the Federal Reserve’s decision to hold off on raising interest rates in March, were the main factors driving this rebound in methanol prices. 　　On the macro level, the economies of Europe and the United States are showing signs of recovery, with expectations of interest rate hikes in the U.S. in April increasing. The U.S. Department of Labor reported that in February 2016, the adjusted non-farm employment figure increased by 242,000, representing a significant rise compared to January ； The unemployment rate dropped to 4.9% in February, remaining unchanged from January and reaching a new low since 2008. Prices in China are rising, and credit issuance slowed down in February. 　　Fundamentals: The upward trend in the domestic methanol market continued in the recent period, but the momentum eased as the weekend approached. Due to maintenance work on some facilities and strong local demand for olefins, prices continued to rise in the major production areas in the northwest at the start of the week; positive prospects led to active order placement. With steady follow-through from downstream players and cost pressures from suppliers driving prices up, the methanol market in the mainland saw increases to varying degrees throughout the week. However, as prices continued to rise, there grew resistance among buyers in the traditional markets; the trading atmosphere cooled down as the weekend approached, and some markets in Shandong saw a slight decline in prices. This week, the coastal methanol market saw fluctuations and a subsequent decline after reaching a peak. At the beginning of the week, prices in coastal areas continued to rise rapidly, but there was a situation where goods were available yet not available for purchase. Due to the significant decline in futures prices and the panic-driven selling by key customers, the balance between buyers and sellers quickly shifted. Starting from the middle of the week, both spot prices and paper-based prices began to fall; buyers kept pushing down prices, and a climate of anxiety persisted in the market. Spot sales are declining steadily, putting pressure on prices to keep falling. 　　As of March 24, methanol inventory in Jiangsu (excluding the Ningbo area) was 375,000 tons, up by 27,000 tons from the previous week (March 17), representing a increase of 7.76%. Among them, the Taicang area accounts for 162,000 tons, the Zhangjiagang area for 31,000 tons, the Jiangyin area for 38,000 tons, and the Nantong area for 30,000 tons. Currently, the total available supply of methanol for circulation in Jiangsu is 167,000 tons. Additionally, the volume of shipments from key storage areas has been low recently, and demand from downstream markets remains lagging behind. Currently, the methanol inventory in South China (excluding Fujian Province) is 36,000 tons, a decrease of 29,000 tons compared to last week (March 17), representing a decline of 44.62%. Overall, methanol inventories in coastal areas (Jiangsu, Ningbo, and South China) rose significantly to 639,000 tons, with the available supply of methanol in these coastal regions being around 219,000 tons. 　　As of March 24, the overall operating rate of methanol production facilities in China stood at 60.69%, a decrease of 1.47% from the previous week ； Construction activity in the Northwest region was 63.6%, down 6.43% from the previous week. During this period, although some shutdown devices were restarted, the shutdown for maintenance of key facilities in the northwest region led to a decline in domestic production rates. 　　From a technical perspective, MA1605 is moving within an upward rebound channel, with its bottom level rising gradually. The rebound was initially rapid; after encountering resistance around 2075, it experienced a pullback. In the coming period, attention should be paid to the support level near the 20-day moving average; if it is breached below this level, prices might continue to drop towards the 1800 area. 　　I. Review of Futures Market Trends In March, the price of methanol futures rose sharply; the main contract MA1605 reached a peak value of 2,075 yuan per ton. Later in March, the price of methanol declined as it encountered resistance, and as of March 25th, it was trading at 1,923 yuan per ton. The continuous rise in international crude oil prices at the beginning of March, along with the Federal Reserve’s decision to hold off on raising interest rates in that month, were the main factors driving this rebound in methanol prices. 　　II. Macroeconomic Analysis 　　1. Recovery in the economies of Europe and the United States; rising expectations of interest rate hikes in the U.S. in April 　　The Institute for Supply Management’s (ISM) manufacturing PMI index for February 2016 was 49.5, up 1.3 points from 48.2 in the previous month ； Although there was a slight increase, it remains below the 50-level. The U.S. manufacturing PMI has remained below the 50 threshold for three consecutive months, indicating a sluggish manufacturing sector. 　　Figure 1: Trend of the U.S. manufacturing PMI index. Source: Wind, Research Department of Guosen Futures. The manufacturing PMI index for the eurozone in March 2016 was 51.4, up 0.2 from the previous month ； The services sector’s purchasing managers’ index was 54, up 1 from the previous month. Both are in expansionary territory, with the eurozone economy showing a slight recovery since February. 　　Figure 2: Trend of the manufacturing PMI index in the Eurozone. Source: Wind, Research Department of Guoxin Futures. The U.S. Department of Labor reported that in February 2016, the seasonally adjusted non-farm payrolls increased by 242,000, marking a significant rise compared to January ； The unemployment rate dropped to 4.9% in February, remaining unchanged from January and reaching a new low since 2008. 　　Figure 3: Employment situation in the United States Source: Wind, R&D Department of Guosen Futures The National Association of Home Builders (NAHB) reported that the NAHB/Wells Fargo Housing Market Index was 58 in March 2016, remaining unchanged from February’s level of 58; overall, it continued to fluctuate at a high level. 　　Figure 4: Performance of the U.S. real estate market. Source: Wind, Research Department of Guosen Futures. The unemployment rate in the United States remains low, with a significant increase in new job creations; expectations of interest rate hikes by the Federal Reserve have risen again in April. 　　2. Prices in China are rising, and credit issuance slowed down in February. In February 2016, China’s Manufacturing PMI was 49, down 0.4 from the previous month. It has remained below the 50 threshold for 7 consecutive months. 　　Figure 5: Trend of China’s official PMI index. Source: Wind, Research Department of Guoxin Futures. In February 2016, the Consumer Price Index (CPI) rose 2.3% year-on-year, with the growth rate increasing by 0.5% compared to January. The CPI has shown a month-on-month upward trend for five consecutive months. In February, the Producer Price Index (PPI) for industrial products declined by 4.9% on a year-on-year basis, with the rate of decline slowing down by 0.4%. 　　Figure 6: Year-on-year growth rates of China’s CPI and PPI Source: Wind, Research Department of Guosen Futures At the end of February, the balance of broad money (M2) was 142.46 trillion yuan, representing a year-on-year growth rate of 13.3%. This growth rate was 0.7 percentage points lower than at the end of the previous month, but 0.8 percentage points higher than during the same period last year ； The balance of narrow money (M1) was 39.25 trillion yuan, up 17.4% on a year-on-year basis; the growth rate was 1.2 percentage points lower than at the end of the previous month, but 11.8 percentage points higher than during the same period last year ； The balance of money in circulation (M0) was 6.94 trillion yuan, a year-on-year decrease of 4.8%. 310.5 billion yuan in cash was recovered net in that month. 　　Figure 7: Year-on-year growth rate of China’s money supply. Source: Wind, Research Department of Guoxin Futures.

III. Methanol spot market

1. Spot market review

Recently, the upward trend in the domestic methanol market has continued; however, market sentiment cooled somewhat towards the end of the week. Due to maintenance work on some facilities and strong local demand for olefins, prices continued to rise in the major production areas in the northwest at the start of the week; positive prospects led to active order placement. With steady follow-through from downstream players and cost pressures from suppliers driving prices up, the methanol market in the mainland saw increases to varying degrees throughout the week. However, as prices continued to rise, there grew resistance among buyers in the traditional markets; the trading atmosphere cooled down as the weekend approached, and some markets in Shandong saw a slight decline in prices. As of Thursday, the average price in the Shandong market was 1,897 yuan per ton, up 4.92% on a month-on-month basis, while the average price in the Inner Mongolia market was 1,605 yuan per ton, up 4.63% on a month-on-month basis. This week, the coastal methanol market saw fluctuations and a subsequent decline after reaching a peak. At the beginning of the week, prices in coastal areas continued to rise rapidly. However, a situation where prices were high but there was no actual trading prevailed. Driven by a significant correction in futures prices and panic-induced selling by major clients, the balance between buyers and sellers quickly shifted. Starting from mid-week, both spot and paper market prices declined together. Buyers continued to exert downward pressure on prices; with little trading activity in the market, frequent occurrences of low prices further fostered a bearish sentiment, leaving the market filled with anxiety. Spot sales are declining steadily, putting pressure on prices to keep falling. As of now, the average price in Jiangsu this week is 1,965 yuan per ton, up 3.37% on a week-on-week basis ； The average price in South China was 2,136 yuan per ton, a month-on-month increase of 10.67%. 　　Figure 8: Trend in methanol prices in major domestic regions (yuan/ton). Data source: WIND, R&D Department of Guosen Futures. 2. Port inventories As of March 24, methanol inventories in Jiangsu (excluding Ningbo) were 375,000 tons, up by 27,000 tons from the previous week (March 17), representing a increase of 7.76%. Among them, the Taicang area accounts for 162,000 tons, the Zhangjiagang area for 31,000 tons, the Jiangyin area for 38,000 tons, and the Nantong area for 30,000 tons. Currently, the total available supply of methanol for circulation in Jiangsu is 167,000 tons. Additionally, the volume of shipments from key storage areas has been low recently, and demand from downstream markets remains lagging behind. Due to the concentrated arrival of imported goods at the ports from March 23 to 25, it is estimated that inventory in Jiangsu will rise rapidly to 441,500 tons over the weekend (Saturday and Sunday). Currently, the methanol inventory at Jiaxing Port in Zhejiang (Meifu, Dongheng, and Taidi warehouses), along with those in the Ningbo area, totals 181,000 tons. This represents a significant increase of 48,000 tons compared to last week (March 10), or a rise of 36.09%. The total amount of supply available for circulation in Jiaxing and Ningbo areas of Zhejiang is 0.50 million tons. Inventory at some key downstream factories has risen rapidly. Currently, the methanol inventory in South China (excluding Fujian Province) is 36,000 tons, a decrease of 29,000 tons compared to last week (March 17), representing a decline of 44.62%. Among them, the inventory in the Dongguan area is around 9,000 tons, while that in the Guangzhou area stands at 27,000 tons. Overall, the available marketable supply in Guangdong is around 24,000 tons. Inventory in the Fujian region is around 47,000 tons. It increased by 6,000 tons compared to last week (March 17), representing a growth rate of 14.63%. Among them, the Quangang area is around 23,000 tons, while the Xiamen area is around 24,000 tons. The total amount of marketable goods available in Fujian is around 23,000 tons. Overall, the inventory levels in Guangdong are lower than those in Fujian, which is why methanol prices in Guangdong continued to rise throughout the week. Overall, methanol inventories in coastal areas (Jiangsu, Ningbo, and South China) rose significantly to 639,000 tons, with the available supply of methanol in these coastal regions being around 219,000 tons. For shipments arriving later, the volume will increase from today until the end of the month; in particular, shipments will arrive in large numbers in Taicang on the 23rd to 25th, while those from South China will arrive in large numbers next week. From today until the end of March, the volume of shipments arriving will be between 101,400 and 110,000 tons. In South China, the estimated arrival volume is around 20,000 to 30,000 tons, while in Zhejiang it is expected to be around 20,000 tons. Pay attention to the port inventory status in the later stage. 　　Figure 9: Inventory in port areas (10,000 tons). Data source: WIND, R&D Department of Guosen Futures. 3. Operating rate of methanol production plants. As of March 24, the overall operating capacity of methanol production plants in China was 60.69%, a decrease of 1.47% compared to the previous week ； Construction activity in the Northwest region was 63.6%, down 6.43% from the previous week. During this period, although some shutdown devices were restarted, the shutdown for maintenance of key facilities in the northwest region led to a decline in domestic production rates. 　　List of the operating status of major domestic methanol plants undergoing maintenance or repairs; Unit: 10,000 tons/year. Source: Zhuochuang Information, Guosen Futures Research Department. 4. Methanol production: From January to December, the total output of refined methanol reached 40.1048 million tons, an increase of 2.6981 million tons compared to the same period last year. 　　Figure 10: Monthly cumulative production of methanol (in 10,000 tons) Data source: WIND, R&D Department of Guosen Futures 5. Methanol imports and exports The cumulative imports of methanol in January were 569,800 tons, an increase of 86,000 tons compared to the previous year ； In January, cumulative exports amounted to 0.02 million tons, a decrease of 34,000 tons compared to the previous year. 　　Figure 11: Monthly imports of methanol (10,000 tons). Data source: WIND, Research Department of Guosen Futures. IV. Upstream and downstream analysis 1. Coal market As of the week ending March 23, the average price index for thermal coal (Q5500k) in the Bohai Sea region was 389 yuan per ton. Over the past year, the price of thermal coal has shown a downward trend; however, it has begun to rise slowly since the end of November. 　　Figure 12: Bohai Rim thermal coal price index (unit: yuan/ton). Data source: WIND, R&D Department of Guosen Futures. 2. Formaldehyde market: In mid-March, formaldehyde prices remained stable; the price of formaldehyde produced by Galaxy Chemical stayed at 1100 yuan/ton, while the price of formaldehyde produced by Taili Chemical dropped slightly to around 900 yuan/ton. 　　Figure 13: Ex-factory prices of major formaldehyde manufacturers (yuan/ton). Data source: WIND, R&D Department of Guosen Futures. 3. Acetic acid market: Acetic acid prices in Jiangsu and Henan provinces saw a slight increase in March. The price of acetic acid at Henan Shunda rose from its previous low of 1,400 yuan per ton to 1,800 yuan per ton, while the price of acetic acid at Jiangsu Sopu increased slightly from 1,850 yuan per ton to 1,925 yuan per ton. 　　Figure 14: Ex-factory prices of major acetic acid manufacturers (yuan/ton). Data source: WIND, R&D Department of Guosen Futures. 4. Dimethyl ether market: The price of dimethyl ether at the downstream level saw a slight increase in March; the price in Hebei region rose slightly to around 2840 yuan/ton, while the price in Shandong region remained stable at around 2750 yuan/ton. 　　Figure 15: Export prices of major dimethyl ether manufacturers (yuan/ton). Data source: WIND, R&D Department of Guosen Futures. V. Technical Analysis From a technical perspective, MA1605 is moving within an upward rebound channel, with its bottom level gradually rising. The rebound was relatively fast at first; after encountering resistance around 2075, there was a pullback. In the coming period, attention should be paid to the support level near the 20-day moving average; if it is breached below this level, prices might continue to drop towards the 1800 area. 　　Figure 16: Daily chart of the methanol 1605 contract. Data source: Boyi Master, R&D Department of Guosen Futures

Analysis and forecast of domestic methanol price trends on April 1 http://www.chemcp.com April 1, 2016, China Chemical Products Network: Methanol prices remain relatively stable. Currently, downstream facilities in various regions of the country are gradually resuming operations, leading to an increasing demand. However, the situation varies from region to region; adjustments are made on a minor scale based on local and surrounding conditions. The market is likely to see a gradual recovery in the future. Northwest: Quotations remain stable; shipments are primarily based on contract execution ； Bohai Rim region: Consolidation with stability prevailing, slight increases in some areas ； Port area: Primarily consolidating, with slight declines in some areas. Forecast: The methanol market is expected to remain stable in the short term.

Methanol prices as of April 1, 2016: http://www.chemcp.com. China Chemical Products Network – Company/Region Name, Type, Price, Remarks: Shanxi Jin Feng industrial-grade methanol, price 1780; refined methanol, price based on acceptance at factory. Shanxi Jiantao Wansinda industrial-grade methanol, price 1800. Henan Hebi coal-electricity methanol, industrial-grade, price 0. Dalian Dahuahua methanol, price -2100, available only for local sales. Hunan Yihua industrial-grade methanol, price 2050, stable supply. Hebei Tangshan Zhongrun industrial-grade methanol, price 0, mainly supplied to local customers. Tangshan Guyu coal coking methanol, industrial-grade, price 1900, cash payment required. Hebei Tangshan Wanfengxing Chemical Industry methanol, price -1950, for external sales. Heilongjiang Baotailong coal methanol, industrial-grade, price 2450. Heilongjiang Jianlong Steel methanol, industrial-grade, price 1950, factory price. Shandong Xinneng Phoenix industrial-grade methanol, price 1950, stable shipments. Shandong Linyi Hengchang industrial-grade methanol, price 1920, normal shipments. Shandong Linyi Lan Yue Chemical Industry industrial-grade methanol, price 1910, for external sales. SNOW Group Xinneng methanol, industrial-grade, price 1680, for external sales. Hebei Dingzhou Tianlu New Energy industrial-grade methanol, price 1880. Shanxi Coking methanol, industrial-grade, price 1720. Hubei Sanning methanol, industrial-grade, price 1900; some products used internally. Cangzhou China Railway Coking methanol, industrial-grade, price 1850, factory price. Jiangsu Yizhou coal coking methanol, industrial-grade, price 1890. Heilongjiang Qitaihe Jiwei methanol, industrial-grade, price 1950. Heilongjiang Yidaxin methanol, industrial-grade, price 1950. Anhui Linhuan Coking methanol, industrial-grade, price 1960, price based on acceptance at factory. Jiangsu Hengsheng methanol, industrial-grade, price 1890. Shandong Yankuang Group methanol, industrial-grade, price 1900, normal shipments. Shanxi Yangmei Fengxi methanol, industrial-grade, price 1900, satisfactory shipments. Shandong Mingshui Dahuahua methanol, industrial-grade, price 1860, smooth shipments. Shanxi Anze Yongxin methanol, industrial-grade, price 1760. Shandong Lianmeng methanol, industrial-grade, price 1820, cash payment required. Heilongjiang China Coal Longhua methanol, industrial-grade, price 2450. Hebei Zhengyuan Chemical Industry methanol, industrial-grade, price 1940, price based on acceptance at factory. Daqing Oilfield methanol, industrial-grade, price 2700, factory price. Henan Xinlianxin methanol, industrial-grade, price 1900. Hebei Jinniu Xuyang methanol, price -1800, factory price. Chongqing Wansheng methanol, price 0, not available for external sales yet. Sichuan Chuanwei methanol, industrial-grade, price 1900. Anhui Haoyuan methanol, industrial-grade, price 1950, price based on acceptance at factory. Keywords: Methanol, Price Database

Analysis of methanol price trends as of April 1, 2016: http://www.chemcp.com. As of April 1, 2016, according to China Chemical Products Network, the average ex-plant price of methanol for enterprises in central and eastern Shandong Province has risen to 1810–1820 yuan per ton, with some prices being slightly higher at 1830–1850 yuan per ton； Traders in Zibo and its surrounding areas quote prices at 1,850–1,880 yuan per ton. In southern Shandong, retail prices for enterprises continued to rise by 10 yuan/ton, reaching 1,880-1,900 yuan/ton ； Traders in the Linyi area can deliver without invoices at a price of around 1,870 yuan per ton; shipment is available for now. The spot ex-plant price for major enterprises in Shaanxi and Inner Mongolia is 1,650 yuan per ton, while the price under acceptance is 1,730 yuan per ton; some contracts are being fulfilled while sales have been halted for others. The ex-factory price for enterprises in northern Shaanxi is 1,680 yuan per ton ； The current spot price for major enterprises in Guanzhong, Shaanxi is 1,680 yuan per ton, while the price under acceptance is 1,730 yuan per ton ； The ex-factory price for enterprises in the northern part of Inner Mongolia is 1,650–1,660 yuan per ton, while most enterprises in the southern part of Inner Mongolia are shut down for maintenance; therefore, no prices are available at present. Local methanol manufacturers in Xinjiang offer prices of 1,200 yuan per ton for exports, while domestic prices range from 1,550 to 1,750 yuan per ton. The main production facilities are operating smoothly; there are no plans for maintenance in the near future, and sales are primarily based on existing contracts. The ex-factory prices of methanol produced from coal and coke oven gas in Heilongjiang range from 1,950 to 2,450 yuan per ton, while the actual transaction prices are around 1,900 to 1,950 yuan per ton. Supply is limited, so the product is mainly sold locally and in Jilin ； The quotes provided by the main traders in Liaoning range from 2,000 to 2,050 yuan per ton. The market price in Qinghai region is 1,400–1,450 yuan per ton. The only major methanol production facility in this area is the one at the Golmud refinery, with an annual production capacity of 120,000 tons; it is operating normally ； The 600,000-ton-per-year plant at Zhonghao and the 800,000-ton-per-year plant at Guilu are both shut down for maintenance. The local ex-factory prices offered by major companies in the southwest region range from 1,850 to 2,000 yuan per ton, while the actual transaction prices lie between 1,850 and 1,910 yuan per ton. The market is largely stable, with manufacturers mainly adhering to their contracts ； In the Sichuan-Chongqing region, the price for major suppliers to deliver goods including taxes is around 2,000–2,050 yuan per ton, with relatively weak transaction volume. The export price from ports in Guangxi ranges from 2,000 to 2,050 yuan per ton, while the prevailing prices among traders in different regions are around 2,200 to 2,250 yuan per ton for delivery. The overall trading activity in the dynamic methanol market is moderate. The ex-factory prices offered by the main manufacturers in Hubei region are 1,900 yuan per ton, while those quoted by traders in Wuhan are 2,080 yuan per ton ； The ex-factory prices from the major manufacturers in Hunan Province are 2,050 yuan per ton, while the prices offered by traders in Changsha are 2,130 yuan per ton. The ex-factory prices of enterprises in Hebei region range from 1,830 to 1,900 yuan per ton, remaining relatively stable. The export price for enterprises in Shijiazhuang and its surrounding areas is around 1,810–1,830 yuan per ton, while the trading price is between 1,800–1,830 yuan per ton ； In the Wen’an area, quotes without tickets are around 1,800–1,830 yuan per ton ； The mainstream selling price in Tangshan is 1,850–1,900 yuan per ton. In the Anhui region, the prevailing negotiation price is 1,950–1,980 yuan per ton upon acceptance. The dynamic methanol market remains stable; major companies are operating normally and are fulfilling their contracts as scheduled. Local methanol producers in Henan region are quoting 1,900 yuan per ton, while the prevailing selling price is around 1,800 yuan per ton; the market as a whole remains stable ； The mainstream quotes from traders in Luoyang are around 1,780–1,870 yuan per ton, with moderate trading activity. The ex-plant price of methanol from the major manufacturers in the southern and southeastern parts of Shanxi Province ranges from 1,700 to 1,750 yuan per ton. The plant in Jincheng is operating stably, with a quoted price of 1,780 yuan per ton ； The spot price for shipment in Linfen is around 1,700–1,720 yuan per ton ； The export price in Changzhi is 1,750–1,760 yuan per ton; overall, shipments are proceeding as usual.

Methanol prices as of April 5, 2016: http://www.chemcp.com. China Chemical Products Network – Company/Region Name, Type, Price, Remarks: Sichuan Chuanwei Industrial-grade methanol, price: 2000; Cangzhou China Railway Coking Industrial-grade methanol, ex-factory price: 0; Chongqing Wansheng Methanol – not for export at present; Guizhou Jinchi Chemical Industrial-grade methanol, price: 2100; Sichuan Dazhou Iron and Steel Industrial-grade methanol, price: 0; Shandong Xinneng Phoenix Industrial-grade methanol, price: 1960, stable supply; Shandong Yankuang Group Industrial-grade methanol, price: 1910, normal supply; Shandong Linyi Hengchang Industrial-grade methanol, price: 1930, normal supply; Heilongjiang Qitaihe Jiwei Industrial-grade methanol, price: 1950; Hebei Shijiazhuang Jinshi Industrial-grade methanol, price: 1860, cash payment; Heilongjiang Yidaxin Industrial-grade methanol, price: 1950; Dalian Dahuahua Methanol – 2100, for local sales only; Henan Hebi Coal and Electricity Industrial-grade methanol, price: 0; Anhui Linhuan Coking Industrial-grade methanol, price: 1960, delivered against acceptance; Shanxi Anze Yongxin Industrial-grade methanol, price: 1760; Heilongjiang Jianlong Iron and Steel Industrial-grade methanol, ex-factory price: 1950; Jiangsu Yizhou Coal and Coking Industrial-grade methanol, price: 1920; Anhui Haoyuan Industrial-grade methanol, price: 1950, delivered against acceptance; Shanxi Jinfeng Industrial-grade methanol, price: 1750, high-purity version delivered against acceptance; Heilongjiang Baotailong Coal Methanol, price: 2450; Jiangsu Hengsheng Industrial-grade methanol, price: 1920; Hubei Sanning Industrial-grade methanol, price: 1900, some products for internal use; Hunan Yihua Industrial-grade methanol, price: 2050, stable supply; Shanxi Jiantao Wansinda Industrial-grade methanol, price: 1800; Shanxi Yangmei Fengxi Industrial-grade methanol, price: 1900, satisfactory supply; Shandong Mingshui Dahuahua Industrial-grade methanol, price: 1900, smooth supply; Heilongjiang China National Coal Group Longhua Industrial-grade methanol, price: 2450; Hebei Dingzhou Tianlu New Energy Industrial-grade methanol, price: 1880; Daqing Oilfield Industrial-grade methanol, ex-factory price: 2400; Hebei Zhengyuan Chemical Industrial-grade methanol, price: 1940, delivered against acceptance; Shandong Lianmeng Industrial-grade methanol, price: 1840, cash payment; Henan Xinlianxin Industrial-grade methanol, price: 1850; Shanxi Coking Industrial-grade methanol, price: 1720. Keywords: Methanol, Price Database

Analysis of methanol price trends on April 5, 2016: http://www.chemcp.com. As of April 5, 2016, according to China Chemical Products Network, in central and eastern Shandong, the standard ex-factory prices increased by 20–30 yuan per ton, reaching 1830–1840 yuan per ton; some transactions were made at 1850–1880 yuan per ton. Traders in Zibo and its surrounding areas quoted prices of 1900 yuan per ton. Dynamic situation: Actual transaction prices can be negotiated, and companies are generally selling their products at normal levels. Shaanxi, Inner Mongolia: Major companies in the Northwest have not yet provided any new quotes. Update: New prices for methanol are expected to be announced this afternoon or throughout tomorrow. Currently, some companies have low inventory levels, so the methanol market in the northwest is likely to remain stable this week. Southern Shandong: Retail prices for enterprises have risen by 10 yuan per ton, reaching 1890–1910 yuan per ton. Traders offer prices of 1870–1880 yuan per ton for deliveries to Linyi area without invoices. Update: Some facilities in the surrounding area are under maintenance, resulting in a tight supply of methanol. Southwest region: Major companies offer local ex-factory prices of 1,850–2,000 yuan per ton, with actual transaction prices ranging from 1,850 to 1,910 yuan per ton. The market is largely stable, with manufacturers mainly adhering to their contracts ； Sichuan and Chongqing regions: Major suppliers charge around 2,100–2,150 yuan per ton including taxes for delivery, and actual transaction volume is low. Hebei region: The factory prices offered by enterprises range from 1,830 to 1,900 yuan per ton, with little change overall. Shijiazhuang and surrounding areas: Enterprise selling prices are around 1,810–1,830 yuan/ton, while trade prices range from 1,790–1,830 yuan/ton ； Wen’an area: The quote without a ticket is around 1,800–1,830 yuan per ton ； Tangshan: The mainstream selling price is 1,850–1,900 yuan/ton. Trend: The situation in Hebei province remains stable overall. Heilongjiang: The ex-factory prices for methanol produced from coal and coke oven gas range around 1,950–2,450 yuan per ton, while the actual transaction prices are around 1,900–1,950 yuan per ton. Supplies are limited, so the product is mainly sold locally and in Jilin ； Liaoning: Quotations provided by major traders range from 2,000 to 2,050 yuan per ton. Dynamic: The Northeast market remains largely stable. Henan region: Local methanol producers are quoting prices at 1,950 yuan per ton, up by 50 yuan per ton; the prevailing selling price is around 1,800–1,820 yuan per ton. The methanol market is on the rise. Luoyang: Traders are offering prices in the range of 1,800–1,870 yuan per ton, with moderate trading activity. Hubei region: The ex-factory prices quoted by major manufacturers are at 1,900 yuan per ton, while traders in Wuhan quote a price of 2,080 yuan per ton ； Hunan region: The ex-factory prices from major manufacturers are 2,050 yuan per ton, while the prices offered by traders in Changsha are 2,130 yuan per ton. Dynamics: The market remains largely stable. Anhui region: Acceptance price of 1,950–1,980 yuan/ton. Market trend: The methanol market plays a key role; production by major companies remains stable, actual shipments are slightly low, and contracts are largely fulfilled. Shanxi region: The ex-plant price of methanol from major producers in the southern and southeastern areas is 1,700–1,750 yuan per ton. The plant in Jincheng is operating stably, with a quoted price of 1,750 yuan per ton ； Linfen: The price for cash shipments is around 1,700–1,720 yuan per ton ； Changzhi: The export price is 1,750–1,760 yuan per ton; overall, shipments are proceeding as usual for now.

Methanol: Blessed by crude oil, ruined by crude oil http://www.chemcp.com April 6, 2016 China Chemical Products Network Driven by rising oil prices and speculative trading, methanol futures experienced a four-month-long rebound. Recently, as oil prices dropped, methanol prices also fell. 　　 Divergent interests make it difficult to maintain production cuts. The sharp drop in oil prices has worsened the economic conditions of major oil-producing countries, leading Saudi Arabia, Russia, Venezuela, and Qatar to form an alliance for production cuts at the beginning of the year. Shikoku agreed to freeze production, with future output not exceeding the level on January 11. In addition, Shikoku hopes to use its own example to attract more oil-producing countries to join, with the aim of increasing the scale of production freezes to raise oil prices and thereby alleviate its own economic pressures. The release of this news boosted market confidence, with the U.S. crude oil index rising from a low of $29.89 per barrel to $43.40 per barrel, an increase of 45.20%. 　　Against the backdrop of overall overcapacity, partial production cuts cannot fundamentally resolve the imbalance between supply and demand; this rise in oil prices should be regarded as a rebound rather than a reversal. As expected, as the production cut meeting in Doha neared in mid-April, tensions among oil-producing countries intensified. 　　Firstly, having just had its oil embargo lifted, Iran has made it clear that it will not participate in production freeze agreements. Iraq and Libya, facing internal unrest and in need of funds to maintain stability, have also chosen to endure long-term pain rather than short-term suffering. Under such circumstances, if production cuts drive up oil prices, the biggest beneficiaries are those who do not participate in the agreement; this fundamentally makes it difficult to maintain production limits in order to keep prices stable over the long term. 　　Secondly, freezing production only limits manufacturing, not supply. Currently, oil-producing countries have high inventory levels, and they can increase supply by releasing these stocks. The recent increase in crude oil exports from major producing countries also confirms this possibility. 　　Due to conflicting interests among oil-producing countries, it is difficult to make substantive progress on production freezes. As the meeting date approaches, negative news may continue to emerge. And this will suppress the price of imported methanol. 　　With no improvement in supply and demand, it’s difficult to raise prices. Crude oil is no longer a reliable source; can the supply and demand dynamics provide the momentum needed for methanol prices to rise? The market estimates that domestic methanol imports in March will be 648,800 tons, an increase of 141,600 tons compared to February. Based on the above assessment of continued declines in oil prices, imported methanol will be more competitive in the future, and it will flow in large quantities into the domestic market. Additionally, at the end of March, domestic methanol producers, especially those in the northwest region, began to carry out maintenance work on a large scale. However, the duration of this maintenance was generally short, so the temporary supply shortage would soon come to an end. On the other hand, regarding domestic port inventories, these have increased as well due to rising imports of methanol. 　　On the demand side, as the weather warms up, downstream use of formaldehyde enters its peak season, and the operating rate of enterprises has returned to 75%. However, companies are generally pessimistic about the future outlook for methanol, and their willingness to stock up is not strong. The operating rate of dimethyl ether manufacturers is around 40%, the overall supply remains stable, and it is unlikely that the operating rate will increase in the future. Acetic acid manufacturers are currently operating at high capacity levels, but demand is relatively weak. In particular, rising methanol prices have increased costs, resulting in narrower profits for the acetic acid industry; as a result, these companies have no intention of increasing their production capacity any further. 　　Although the utilization rate of methanol in downstream applications has increased, weak terminal demand has led to little enthusiasm on the part of downstream users to stock up on methanol. Moreover, an increase in imports in the future can offset any rise in demand, resulting in a stable supply and demand situation for methanol, which has a limited impact on prices. 　　In summary, methanol’s previous rebound was mainly driven by rising oil prices and a positive market sentiment; however, the supply-demand situation has not seen any significant improvement. Later, as oil prices declined, methanol returned to a weak trend.

The trends in the industrial chain are positive; methanol still has room for further increases. http://www.chemcp.com April 6, 2016 China Chemical Products Network I. Market Review Since early February, the 1605 contract for methanol has seen a volatility of 19.94%, with a rise of 3.87%. The shift in stance of some Federal Reserve officials from a dovish to an hawkish approach led to an increase in the value of the US dollar, which in turn put pressure on commodities such as crude oil. The spread of negative sentiment disrupted the upward trend of domestic methanol futures, causing the main methanol contract for May 2016 to experience a correction from its high levels. After reaching a peak of 2,075 yuan per ton last Tuesday, the futures price quickly declined, stabilizing only after dropping to around 1,900 yuan per ton. In my opinion, as short-term negative factors are absorbed by the market, supported by still favorable supply and demand conditions, methanol is expected to gradually regain its previous losses in the future. 　　II. Analysis of influencing factors
2.1 Despite recent declines, crude oil still has upward momentum in the future
At present, there are three main reasons for this week’s price drop: First, inventory pressures on crude oil remain; in particular, recent U.S. crude oil inventory data indicate that these pressures are becoming increasingly severe, putting downward pressure on crude oil prices recently ； Second, expectations regarding the production freeze meeting have changed. The market believes that even if the meeting proceeds smoothly, its effectiveness will be undermined by the fact that U.S. crude oil is now being exported to various parts of the world ； Third, the overcorrective rebound in the dollar index and the sharp decline in short positions in crude oil, which pushed prices into an overbought area, led to a drop in crude oil prices. 　　Currently, the market is focusing on the global agreement to freeze oil production that is set to be reached in April. Moreover, although the number of oil drilling platforms in OPEC member countries is on the rise, the total number of such platforms worldwide is declining; as a result, the growth rate of crude oil supply is slowing down. With the peak period of gasoline consumption approaching in the summer, it is expected that crude oil prices will still have room to rise in the future. 　　The positive outlook for crude oil prices will directly provide a breather for the cost side of MTO in the methanol industry. 　　2.2 Maintenance activities at methanol plants are entering a peak period; port inventories remain low. As of the end of March, the overall operating rate of domestic methanol plants stood at 60%, a decrease of 1.15% from the previous month ； Construction activity in the Northwest region was 68.76%, down 4.19% from February. Among them, Donghua Energy’s 600,000-ton facility will undergo maintenance shutdown in late March, while the 600,000-ton facilities of China Coal Yuanxing and Yutianhua will also be scheduled for maintenance at the beginning of April. Meanwhile, the 900,000-ton methanol plant of Jiu Tai in Inner Mongolia and the 1.2 million-ton methanol plant of Guanghui Energy in Xinjiang are also scheduled for maintenance in April or May, which together will result in a 32.5% reduction in production capacity; thus, the expectation of a tight methanol supply remains. 　　As of the end of February, according to statistics from Longzhong Petrochemical Network, the inventory at Ningbo ports along the coast was around 80,000 tons (including supplies from He Yuan), the inventory at ports in Jiangsu was around 330,000 tons, and the inventory at ports in South China was around 89,000 tons (including those in Fujian). Of this, 54,000 tons are in the Guangdong region, and around 35,000 tons in Fujian. The total domestic social inventory of methanol is 459,700 tons, a decrease of 13,000 tons compared to the end of February, with 177,500 tons available for circulation. . Low port inventories are attributed, on the one hand, to weak import momentum, and on the other hand, to the low operating rates of production facilities after the Spring Festival, which prevents methanol inventories from building up in the short term. 　　2.3 Improved profits as downstream MTO operations resume In terms of downstream profits, the profitability of dimethyl ether and formaldehyde remains low; MTO, driven by higher prices set by the petrochemical industry, sees an increase in its export prices and thus improved profits, while other downstream products operate with only minimal profits. 　　Although the operating rates of facilities producing formaldehyde, dimethyl ether, and acetic acid have generally declined, and profit levels are at low levels, leading to a possible reduction in demand for the raw material methanol, prices of methanol in certain regions of China still increased by 10–170 yuan per ton, thanks to the support provided by new olefin production facilities in the northwest and Shandong provinces. 　　At present, traditional downstream demand sectors still have a need for periodic stockpiling of methanol. However, in the olefins sector, MTO operations generate relatively high profits; both China Coal Mengda and Otsuka Chemical have plans to source methanol from external suppliers. Additionally, new MTO production capacity is set to come online in China in April, so it is expected that demand for methanol will not decline in the future. Overall, the demand for methanol in downstream applications is decent, and it remains on an upward trend. 　　Apart from traditional consumption areas, in terms of emerging demand, the capacity for producing olefins from methanol has been increasing in recent years, leading to a rising consumption of methanol. Especially since the beginning of this year, the demand from olefin production facilities has helped to keep methanol prices stable. It is estimated that there will be nearly 2.5 million tons of new methanol-to-olefins capacity this year (including projects postponed in 2015). Among them, over 1.2 million tons of production is planned for the first half of the year; therefore, companies without upstream methanol production facilities will stock up on raw materials at an appropriate time before their olefin plants begin operations, while those with such facilities will gradually reduce the export of methanol. It is expected that emerging demand sectors in the future will drive higher-than-expected growth in methanol consumption, which will help to push methanol prices upward steadily. 　　Recently, there have been some negative factors in the macroeconomic landscape that have disrupted the upward trend of methanol futures; however, the period of intensive maintenance activities at domestic plants has not yet passed, and supply constraints still exist. Furthermore, with ongoing demand for olefins and purchasing potential remaining in traditional consumption sectors, the room for a decline in methanol prices is likely limited. The author believes that although short-term methanol futures still need to absorb negative factors, further declines are likely to be met with resistance from buyers, and methanol prices will once again start to rise. 　　III. Outlook for the Future 　Regarding crude oil, it will take a considerable amount of time for the issue of overproduction to be resolved. As the market shifts toward a model driven by efforts to freeze production levels, coupled with a downward trend in the value of the dollar and a gradual improvement in the global supply of crude oil, prices are expected to rise again after a short-term decline. 　　In April, methanol enters a period of intensive maintenance activities; profits in downstream MTO sectors improve and demand rises. Investors should wait patiently for any negative macroeconomic factors to subside before entering long positions again, with the estimated time for building such positions being mid-to-late April.

It is likely that methanol will remain in a volatile range during the second quarter. http://www.chemcp.com April 6, 2016, China Chemical Products Network. After April, the operation rates of domestic and foreign production facilities will gradually increase. In March, methanol production facilities underwent extensive maintenance, resulting in an operation rate below 60%. Although some facilities continued to be under maintenance in April, the extent of such maintenance was significantly reduced, and the facilities that were shut down earlier will also start operating again soon; as a result, the supply volume is expected to increase gradually during the second quarter. 　　The price gap between domestic and international markets remains high, and import pressures are likely to persist. In March, imports of methanol increased significantly, yet the price difference between the two regions did not narrow noticeably; it is expected that import volumes will remain high in the coming period, meaning import pressures will continue to exist. 　　Traditional demand is expected to continue recovering, with demand for olefins on the rise. Among traditional demands, demand for dimethyl ether declined significantly in the first quarter, but demand for formaldehyde and acetic acid is still slowly recovering. Regarding olefins, attention should be paid to the maintenance work at the olefin production facilities of Shenhua Baotou and Ningxia Baofeng in the coming period; at the same time, it is also important to keep an eye on the new production capacities being brought online by China Coal Mengda, Shenhua Xinjiang, and Fude Changzhou. The overall trend of improving demand will remain unchanged. 　　Both supply and demand are on the rise, so it is likely that methanol will remain in a volatile range during the second quarter. Based on this analysis, there will be a continuous increase in both supply and demand throughout the second quarter. On the supply side, there are still plans to bring new production capacity online; although the utilization rate has been low since last year, expectations of additional capacity remain. As for the operating rate of existing plants, there was significant maintenance activity in March. Although some plants will continue to be under maintenance in April, the scale of such maintenance will be less than that in March. The plants that were shut down in March will restart gradually in April and May, and it is likely that their operation will remain stable thereafter. Therefore, domestic supply is expected to keep increasing during the second quarter. Regarding imports, the profit margin for imports remained high in March, and overseas plants are also restarting one after another. The price difference between China and other countries remains high, so import volumes are likely to stay at a high level as well ； On the demand side, traditional demand is already at its lowest level; profits from the production of formaldehyde and acetic acid are minimal, while demand for dimethyl ether continues to decline. It is unlikely that traditional demand as a whole will improve any time soon. As for emerging demands, attention is focused on the planned maintenance activities at Shenhua Baotou and Ningxia Baofeng. However, the overall trend remains one of gradual expansion of olefin production facilities. At present, the profit margin from importing methanol is favorable. Overall, there are strong expectations of an improvement in emerging demands. Therefore, in the second quarter, both supply and demand for methanol are expected to increase, leading to a situation with mixed forces at play. We maintain our view that prices will fluctuate within a certain range; the price range for MA609 is expected to be between 1850 and 2050 yuan per ton. Investors are advised to take actions within this price range.

Analysis and forecast of domestic methanol price trends on April 6 http://www.chemcp.com April 6, 2016, China Chemical Products Network: The domestic spot market showed mixed trends with some increases and some decreases. Manufacturers in Shaanxi and Inner Mongolia have not yet announced new prices; the current mainstream price in the Northwest is 1,650–1,730 yuan per ton ； Prices in the Bohai Sea region rose slightly, with prices in northern Shandong increasing by 20 yuan per ton to range between 1830–1850 yuan per ton ； In the Huaihai region, the price increased by 30 yuan per ton, reaching 1,890–1,920 yuan per ton ； Futures prices declined weakly, with port prices continuing to fall. Prices in East China dropped by 10 yuan/ton, ranging from 1860 to 1990 yuan/ton, while those in South China fell by 60-70 yuan/ton, ranging from 1990 to 2020 yuan/ton. Prices in other regions remained stable for the time being. After the holiday, the domestic methanol market continued to show regional variations in prices. New prices have not yet been set in the northwest region, while prices in the Guanzhong area of Shaanxi remained relatively stable. Demand in regions such as North China and Central China was satisfactory, and overall recovery in the domestic downstream sector was also acceptable. Current port prices in East China are now lower than those in the Huaihai region; some goods may be sent north for arbitrage, leading to a reduction in inventory levels, and prices may reach a bottom in the short term. Today, the focus in the northwest is on contract execution, with stable new prices in Guanzhong ； Trading in the Bohai Rim region is fairly steady, while prices in Shanxi and northern Shandong see slight increases ； Activity in the Huaihai region has improved, with further slight increases ； Shipments in Central China are currently possible, while prices from manufacturers in Henan are rising ； Futures declined weakly, with port prices continuing to fall. Ports in East China saw a slight decline in Jiangsu, while those in Zhejiang remained stable; ports in South China experienced a significant drop in prices. Under the influence of multiple factors, the domestic methanol market is likely to remain in a state of narrow-range consolidation in the near term, with trends that are localized or regional in nature.