The fundamentals of methanol market show signs of improvement

The Negative tunnel gradually dissipated

In recent years, the domestic methanol market is still strong in Northwest China and weak in East China under high inventory pressure. Among them, the sales price of methanol in Northwest China ranges from 2120 to 2250 yuan/ton. Reporters learned that the price of methanol in Northwest China is strong due to the maintenance of several inland methanol plants. However, the methanol inventory in East China is relatively high, and the price of methanol has declined. At present, the spot quotation is 2430-2500 yuan/ton.

With the overall methanol oscillation downward in the last two weeks, market sentiment has also weakened. According to Hu Xin, a futures analyst in Yide, the performance of the current market is actually expected. On the one hand, the impact of the reduction brought about by the previous market expectations of domestic and foreign equipment maintenance did not appear in March. On the contrary, large-scale plants such as Zhonghao, Boyuan and Datang were restarted one after another. The methanol start-up rate remained high and reached a new high at the end of March. Coastal stocks also reached a new high in mid-month. On the other hand, the reduction of VAT reduces the cost of goods in the later period, which has a negative impact on futures contracts after April. In addition, the joint effect of formaldehyde shutdown in northern Jiangsu and southern Shandong and the sharp drop of ethylene glycol on methanol caused by the safety inspection of dangerous chemicals is also an important reason for the recent weakening of methanol.

For the current methanol price, many market participants said that they had basically reflected the “poor expectations”. “Expectation difference” refers to the contrast between the anticipation of reduction in spring inspection and the reality of high innovation in construction. “Methanol prices have fallen for more than two weeks and valuations have fallen to a low level.” Hu Xin said.

It is understood that in the second quarter of each year, the methanol plant in the north, especially in the northwest, will be routinely overhauled. The spring inspection will result in a decrease in the start-up load of the methanol plant in the second quarter. “At present, the profit of coal-to-methanol in Northwest China is good, with an average profit of about 600 yuan/ton. In addition, the price of methanol has stopped falling and stabilized at present, enterprises may postpone overhaul.” Huang Liqiang, director of Jinshi Futures Investment Consulting Department, explained.

It is noteworthy that the recent rise in international oil prices, OPEC + production restriction effect is obvious, crude oil prices in the first half of the year basically did not expect a substantial decline. In this context, the cost support of petrochemical products has been strengthened, most of the product prices have rebounded, and some of the product prices have increased significantly. Affected by this, the recent methanol market sentiment has gradually returned to rationality.

“For the methanol market, the supply reduction caused by the overhaul of foreign units is large, and the import of olefin units in the port area is expected to decrease significantly in April. In order to meet the normal demand, some of the olefin units in the port area began to increase the intensity of inland procurement.” Yu Qiansen, a gold futures analyst, believes that the impact of safety inspections on the methanol market will basically dissipate in the middle of this month, and that the benefits of spring overhaul and a sharp reduction in imports are gradually being realized. “If methanol stocks in coastal areas fall sharply this month, it is reasonable for the market to strengthen again.” In his view, according to the current market development and expectations, there is no basis for a sharp decline in methanol prices, which will gradually strengthen in the later period.

At present, the value-added tax has settled down, the futures and cash arbitrage has begun to leave the market gradually, and the market is showing signs of stopping the decline. In the past two weeks, coastal stocks have begun to decline slightly. Imports are expected to decline in April. Mainland maintenance will also be gradually realized. Later fundamentals may turn better. But in Hu Xin’s view, it is still too early to say that the market reversal, data still need to see the decline in methanol start-up rate and continued inventory depletion.

As the methanol-to-olefin plant in Nanjing is being completed and ready for commissioning, cargo in the port area is expected to decrease rapidly, but whether the follow-up foreign plants can meet the increment is unclear. “It is understood that the Iranian device is not stable and is currently under maintenance. Because of the sanctions imposed by the United States on Iran, the actual supply of Iranian goods is not normal. Whether the supply can be stabilized or not is unknown. If the supply cannot be stabilized, there will even be a shortage of supply and demand in the port area. Yu told Futures Daily.

“In terms of demand, we should pay attention to the recovery after formaldehyde security inspection and the start-up process of new MTO production in Jiutai, Luxi, Chengzhi and Baofeng. In addition, we also need to pay attention to the linkage effect of price changes of ethylene glycol, ethylene and other chemical products on methanol. Hu Xin said that at present, the demand for coal-based olefins accounts for more than half of the total demand for methanol, and the demand for coal-based olefins is crucial to the demand for methanol.