Safety inspection and environmental protection are coming together, and methanol supply is affected.

The State Council’s Security Committee recently issued an urgent notice calling for a comprehensive investigation and remediation of potential safety hazards of dangerous chemicals. The explosion accident of Jiangsu Xiangshui Tianjiayi Chemical Co., Ltd. has once again sounded an alarm for the whole chemical market, especially for the production of dangerous chemicals.

The methanol market has always been the focus of dangerous chemicals inspection. “As far as methanol is concerned, the production enterprises in Shanxi, Shaanxi and Inner Mongolia have been affected to some extent. More than 10 methanol production enterprises in Shanxi are facing upstream and downstream safety checks, and the supply of methanol will shrink significantly in the short term.” Yu Qiansen, an analyst at Zhaojin Futures, said that by analogy to Hebei, Shandong and other regions, a large number of coking enterprises are facing a new round of inspection and rectification, and production may continue to shrink on the basis of spring maintenance.

For the eastern market, the impact of this safety inspection on methanol supply is obviously greater. “If transport is coupled with more inspection efforts, the eastern region will face a situation of methanol shortage in supply and demand. In addition, the safety inspection will affect a small number of small and medium-sized methanol users, mainly methanol to olefins, MTBE, formaldehyde in Jiangsu and Shandong. Most enterprises are large-scale security clearance enterprises, only some formaldehyde and other downstream will be affected. In Qiansen’s view, there have been many major accidents in the methanol market. In this inspection, the transportation of methanol will face more stringent restrictions than before.

In the view of Wang Pu, an analyst at Jin Lianchuang, the main impact on the methanol market is supply, demand and warehousing. “At present, the upper and middle reaches have less impact, because the upper reaches are mostly large devices and most of them comply with the regulations; in the lower reaches, Yancheng area is mostly downstream enterprises such as pesticides and pharmaceuticals, and in the vicinity are Shuyang and Linyi formaldehyde enterprises. This event may have an impact on formaldehyde demand, and Lianyungang area may not be affected much. From the warehousing point of view, more likely to affect warehousing enterprises such as incomplete procedures, short-term or faster delivery speed. Wang Pu said.

Futures Daily reporter learned that not only the security inspection “hurricane”, but also the recent “battle for environmental protection” continued to increase the code. Coking coal and coke enterprises limited production, but also affected the methanol market.

It is understood that 30% of methanol enterprises in China still use coke oven gas to produce methanol, most of which are concentrated in Shanxi, Hebei, Shandong and Jiangsu areas. Limited output of coke and Coke will result in insufficient output of coke oven tail gas. Except Shanxi, methanol consumption is large in the above-mentioned areas. The sharp reduction of supply will lead to the shortage of methanol supply.

“Current coal production restrictions are beneficial to methanol as a whole. Because of the reduction of coal supply, the cost of methanol is rising.” Wang Pu said that 70% of methanol in China is coal-based methanol. The rise of coal cost will be transmitted to the downstream market through the rise of methanol price, especially to the northwest methanol market in Lido. In the later period, the price gap between East and west of methanol market may narrow.

At present, the main factors affecting the methanol market are spring inspection in the Mainland, high inventory in ports and import shrinkage in April. “For the methanol industry chain, if security is upgraded, transportation from northwest to East will be severely restricted. Under the influence of the start-up of Jiutai methanol-to-olefin plant and the delayed maintenance of Yan’an energy methanol-to-olefin plant, the quantity of methanol that can be exported in Northwest China has decreased, combined with the closure of arbitrage between the two places, or the shortage of methanol supply in eastern China, resulting in a rapid decline in inventory. Yu said.

In addition, it is noteworthy that the spring overhaul in the main inland production areas is imminent, and some devices have begun to be overhauled, resulting in a reduction in supply. The safety inspection upgrade will magnify the maintenance effect.

In his view, methanol prices have been relatively low, crude oil continues to be strong, cost support for the entire energy-based industrial chain has formed, methanol is expected to take this opportunity to form a new round of growth.