Slow recovery of downstream demand, methanol price “all the way down” in March

1、 Price trend


In March, the domestic methanol market continued to decline. According to the price monitoring of business agency, the average price of domestic methanol market at the beginning of the month is 2022 yuan / ton, and the price of domestic methanol market at the end of the month is 1607 yuan / ton, down 20.52% in the month, 32.40% compared with the same period last year.


2、 Market analysis


Product: affected by the emergency safety events, the downstream demand of domestic methanol spot market recovers slowly, especially the traditional downstream market; however, after the impact of the development of foreign epidemic situation in the middle of March, the continuous drop of foreign financial market triggers the fuse, the international crude oil price drops to $20.8/barrel, the external environment pressure, the methanol drop is wide, and the new low of the year has been refreshed in many places, and some regional production enterprises have touched on it Production line or loss.


PVA 2699

Industry chain: formaldehyde: this month, the domestic formaldehyde market fell in a wide range. In the context of global public health events, the overall start-up of domestic formaldehyde enterprises at the beginning of the month was depressed. With the introduction of domestic policies to support enterprises to resume work and resume road transportation, most enterprises began to resume production in the middle of the month. Although the domestic public health events improved this month, affected by the external environment, the U.S. stocks repeatedly broke, international crude oil plummeted, and the domestic upstream methanol level continued to decline. In this context, the cost side is not enough. The export of some plate enterprises in the lower reaches is affected by the overseas epidemic, the orders are blocked, the enterprises have sufficient inventory and Limited procurement. Formaldehyde enterprises are under pressure from the demand side, and the overall transaction is flat.


Acetic acid: the domestic acetic acid market continued to decline in March. At the beginning of the month, some acetic acid production enterprises considered the annual production requirements, costs and other situations, and increased the starting load of the unit, resulting in the increase of the spot supply in the market, aggravating the situation that the market supply is greater than the demand. In addition, the northwest, Henan and other spot manufacturers have a large inventory pressure, passive competitive bidding, and driving the market price transaction down.


Dimethyl ether: this month, the market price of dimethyl ether continued to fluctuate downward, and the trading atmosphere was weak. After March, the domestic dimethyl ether industry, except for some enterprises, has basically entered a comprehensive production state. However, due to the continuous price reduction in the later period, some enterprises have reduced their load production. At present, Sichuan Lutianhua, Shandong shengdeyuan and Shandong Yuhuang have not started construction. With the gradual fermentation of the international epidemic, the crude oil market has been greatly impacted. This month, the crude oil price has been fluctuating downward, which has seriously impacted the price of liquefied gas and brought down the volume and price of dimethyl ether trade.



Industry: according to the price monitoring of the business agency, in March 2020, there are 24 kinds of commodities in the list of rise and fall of bulk commodity prices in the chemical industry sector, including 7 kinds of commodities with an increase of more than 5%, accounting for 8% of the number of commodities monitored in the sector; the top three commodities with an increase are isopropanol (55.64%), methylic acid (20.51%) and ammonium chloride (20.48%). There are 59 kinds of commodities falling on a month on month basis, 46 kinds of commodities falling by more than 5%, accounting for 52.9% of the number of commodities monitored in the sector; the top three products falling are pure benzene (- 49.82%), crude benzene (- 36.94%) and toluene (- 33.67%). This month’s average rise and fall was – 8.47%.


3、 Future forecast


Business club’s view: on the positive side, the domestic methanol price continues to decline, some of which has fallen near the cost line, and some of the factories have lost money; most of the factories in the main production area have little inventory pressure, and the purchase of purchased olefins is relatively considerable. On the negative side, overseas public security incidents triggered market concerns. The trend of international crude oil, finance and stock market was weak, and market participants were worried about it. Port demand was limited, and the arrival of inventory was stable, but the unloading speed was slow due to the shortage of storage capacity. After the gas limit in Iran was eased, methanol production increased, and it is expected to arrive in China in the next March April. At present, the financial environment and international oil price have become the main logic affecting the bulk commodities, and the product fundamentals have little impact, so it is possible for methanol to continue to explore the bottom. The methanol analysts of the business club predict that the methanol market in April is still weak and volatile.