Recently, the methanol 2109 contract has accelerated its rise, and the futures price has risen strongly from 2450 yuan/ton to the highest point of 2852 yuan/ton, a new high since 2018. In view of the tight coal supply, high coal prices, significant increase in methanol costs, and the optimism of its own fundamentals, the outlook for the methanol 2109 contract is expected to continue its steady upward trend.
The turning point of global monetary policy has not yet arrived
Recently, developing countries such as Brazil, India, Nepal, and Southeast Asia have been attacked by the new crown variant virus. The number of confirmed cases in a single day has continued to rise. The counterattack of the epidemic has put tremendous pressure on global epidemic prevention. In sharp contrast with developing countries such as India, the current COVID-19 vaccination rate in European and American countries has steadily increased, and the economy has entered a period of strong recovery. Data show that the final value of the Eurozone manufacturing PMI in April was 62.9, continuing to maintain a positive trend; the ISM manufacturing PMI index of the United States in April was 60.7, although it has fallen from 64.7 in March, it is still at a relatively high level in history. The overall momentum of the economic recovery is optimistic.
In addition to the economic improvement of the developed economies in Europe and the United States, the CPI in the United States increased by 4.2% year-on-year in April, the growth rate hit a 13-year high, and the global market's anxiety about inflation began to increase. However, even so, Fed officials are still emphasizing that any rebound in inflation this year is temporary. During the May Day holiday, U.S. Treasury Secretary Yellen suddenly stated that it might raise interest rates in response to the overheating of the economy, but then many Fed officials clarified the "rate hike" and repeatedly emphasized that the Fed will continue its loose monetary policy. At present, there are still great uncertainties in the global economic recovery. Therefore, the global monetary easing tone will remain for a period of time in the future, and it is inappropriate for the policy to change sharply in the short term or to tighten the monetary policy in advance. Commodities such as methanol will continue to be strong.
Many provinces have introduced dual energy consumption control policies
In order to achieve the goal of completing the “carbon peak” by 2030 and the goal of “carbon neutral” by 2060, since this year, many provinces in China have successively introduced energy consumption dual control policies. On February 19, 2021, the Development and Reform Commission of the Inner Mongolia Autonomous Region issued the "Pre-Notice on Carrying out the Joint Investigation on the Approval and Construction of High Energy Consumption Projects in the Region"; On February 25, the Inner Mongolia Autonomous Region issued the "Regarding Ensuring Completion of Energy Consumption in the 14th Five-Year Plan Several safeguard measures for dual control objectives and tasks (draft for comments)", the article mentions that the new methanol production capacity project will no longer be approved from 2021. On February 26, the Shandong Provincial Energy Bureau issued the "Notice on Carrying out Special Supervision on Energy Consumption and Energy Conservation per Unit Product of Refining and Coking Enterprises", requesting that special supervision be carried out on the energy consumption per unit energy factor of refining and chemical enterprises and the energy consumption per unit of coke products of coking enterprises. , The time is from April to July 2021. Some of the methanol-related refinery enterprises and some coke oven gas-to-methanol enterprises are listed in the list. On March 2, the Shanxi Provincial Development and Reform Commission and the Shanxi Provincial Energy Bureau issued the "Notice on Further Sorting out the "Two Highs" Projects to be Put into Production in the "14th Five-Year Plan".
It is worth noting that Inner Mongolia is not only the province with the largest methanol inventory and production capacity in my country, but also the main province of my country's new methanol production capacity in recent years, and its express statement means that it will control the production capacity of high-energy-consuming industries in the region. In other words, the expansion of domestic methanol production capacity will be strongly restricted by policies. In addition, the dual energy consumption control policy will also suppress capacity utilization. In the past few years, the methanol production capacity of the ammonia alcohol co-production process has been significantly reduced, and the natural gas-to-methanol production capacity has become more and more obvious seasonal production characteristics. The coke oven gas-to-methanol production process has been reduced during the coking industry. The policy means that the capacity utilization rate in the field of coal-to-methanol will also be restricted by the policy, at least the initial overload production will be subject to strict policy control.
The tight domestic methanol supply has eased
March to May every year is the centralized maintenance phase of domestic methanol enterprise installations. Generally speaking, March to April is the concentrated period of spring inspection of methanol in the Mainland. Although there are still some equipment planned for maintenance from May to June, they are relatively scattered and the total amount has been reduced. The data shows that the domestic spring inspections from March to May of 2021 will involve approximately 12.46 million tons of production capacity, more concentrated in March to April, and the maintenance plan for May to July is limited. However, this year is slightly different from previous years. Since mid-April, most methanol companies in the northwest region have taken measures to stop sales and limit their sales, which has exacerbated supply tensions.
At present, the spring inspection of domestic methanol companies is coming to an end, and the industry operating rate is showing signs of picking up. According to statistics, as of May 13, the methanol operating rate was 81.28%, an increase of 7.05 percentage points from the previous week. On the whole, the mainland is short-term in a state of short-term shortage of stocks, and the production areas have a strong willingness to raise prices. It is expected that there will still be some planned maintenance of some plants from May to June, but they are relatively scattered and the total amount is reduced. At the same time, the 1 million tons methanol plant of Inner Mongolia E Energy and the 1.8 million tons of methanol plant of Guangxi Huayi have plans to put into operation, so the overall The domestic supply has increased slightly, and the tight supply in the early stage may be eased.
Too many overhauls of methanol plants in overseas markets
In April, the operation of overseas methanol plants was not stable, the overhaul capacity was too large, and the supply source was insufficient. Although Iranian FPC's annual production of 1 million tons of methanol was restarted around April 3 after being shut down for half a month for maintenance, but recently Iranian Kimia's annual production of 1.65 million tons of methanol was temporarily shut down due to pipeline problems, and the specific restart time is yet to be determined. . At the same time, Iran’s ZPC methanol plant with an annual output of 1.65 million tons is scheduled to be overhauled around mid-May. Therefore, from late April to mid-May, Iran’s methanol supply is tight. In addition, Trinidad and Tobago MHTL's 2.45 million tons methanol plant shut down due to raw material problems, and the restart time is undetermined. In the context of the overhaul of multiple overseas installations, it is difficult to find low-priced sources of methanol in the overseas methanol market. However, the limited cargo exports to China have caused the delay of the methanol storage cycle at domestic ports.
Recently, the arrival of methanol cargoes in East China is acceptable, and the overall inventory has increased slightly. As of May 13, the total methanol inventory at East China ports was 418,800 tons, an increase of 25,500 tons from the previous week, an increase of 6.5% from the previous week, and a decrease of 258,500 tons from the same period last year, a decrease of 38.21%; the arrival of methanol cargoes in South China Acceptable, the port inventory was 101,000 tons, a decrease of 3,900 tons from the previous week, a decrease of 3.67% from the previous week, and a decrease of 92,900 tons from the same period last year, a decrease of 48.13%. At present, the total inventory of methanol at ports in East China and South China is 518,100 tons, a decrease of 10.36% from the average inventory of the same period in the past four years, and a 14.50% decrease from the average inventory of the same period in the past seven years.
In terms of tradable inventory, according to incomplete statistics, the overall circulated supply of methanol in coastal areas (Jiangsu, Zhejiang and South China) last week was around 220,000 tons, an increase of 10,000 tons from the previous week. As of May 20th, there are about 250,000 to 270,000 tons of arrival plans in East China, including some cargoes that have arrived at the port but not yet unloaded, and there are 20,000 to 30,000 tons of arrival plans in South China, and some cargoes are delayed. Arrival is possible.
In the case of a shortage of overseas methanol supply, the cargo exported to China is limited, resulting in a delay in the timing of methanol accumulation at domestic ports compared to previous years. In the first quarter, China's average monthly methanol imports were around 850,000 tons. With the restart of installations in Iran, America and Southeast Asia, it is expected that China's methanol imports may recover to 1.05 million to 1.1 million tons by June.
Increase in methanol downstream consumption is expected
According to different production methods, methanol is mainly divided into coal production, natural gas production, and coke oven gas production. The distribution area and cost of the three production methods are different. At present, more than 75% of domestic methanol production capacity is based on coal-based process routes, and the remaining methanol plants with natural gas and coke oven gas as raw materials account for about 24% of the total. From the perspective of the cost structure of the coal-to-methanol plant, the cost of raw coal and fuel coal accounted for 70%-80% of the total cost. Therefore, the impact of coal price trends on the cost of methanol is more obvious.
Since March, domestic coal supply has continued to be tight, and coal prices have continued to rise in the off-season. The spot price of coal rose sharply in late April, leading to a significant increase in the cost of coal-to-methanol. Calculations found that in the past month, the spot raw material coal and fuel coal for coal-to-methanol in Northwest China have increased by 27.35% and 9.6%, respectively, causing the cost of coal-to-methanol in Northwest China to rise by 15.16% to 2225.29 yuan/ton. In terms of manufacturing costs, although coal-to-methanol in Northwest China is currently profitable, the cost-profit ratio is 11%, but it has fallen by about 9% compared with half a month ago. The average cost-profit ratio of the methanol industry in Northwestern China has been around 25% this year. . Therefore, the short-term sharp rise in coal prices quickly swallows up the profits of methanol production, and also forces the subsequent increase in methanol prices to restore the normal profit value. As of May 13, Northwest Coal-to-Methanol Futures' disk profit was 514.71 yuan/ton.
The cost of coal procurement in Central China is higher than that in Northwest China. In the past month, the spot raw material coal and fuel coal for coal-to-methanol have increased by 26.45% and 25.44%, respectively. As a result, the cost of coal-to-methanol manufacturing in Central China has risen by 17.10%. 2277.29 yuan/ton. Calculated by manufacturing costs, although coal-to-methanol in Central China is profitable, the cost-profit ratio is 18.56%, but it has fallen by about 17 percentage points from half a month ago. The average cost-profit ratio of the methanol industry in Central China has been around 28% this year. As of May 13, Shandong coal-to-methanol futures disk profit was 462.71 yuan/ton.
From the analysis of the cost of coal-to-methanol in Northwest China and Central China, the significant increase in coal prices has a significant effect on the revaluation of methanol costs, and the upward effect is strong.
On the other hand, there is an increase in methanol downstream consumption expectations. In the traditional consumption field, the demand for formaldehyde in the second quarter gradually entered the off-season, and the overall start of construction may be reduced. However, considering the stable demand for sheet materials and the acceptable profit of formaldehyde, the shrinkage in the second quarter is limited. In terms of demand for acetic acid, the recent start of acetic acid has been relatively low, and some installations have remained shut down. Later, there are expectations for recovery. The start of acetic acid may increase to above 90% again. Therefore, the demand for acetic acid is expected to increase slightly. In terms of MTBE demand, some of the refineries in Shandong are scheduled to be overhauled in the second quarter, but due to profit problems, the overhaul may also be postponed, and the region is dominated by just-needed purchases, so the market shrinkage is limited. In the emerging consumer sector, the operating rate of domestic olefin companies has remained at around 90% since the beginning of this year, which is the highest level in the same period in the past five years. At present, the overhaul of the coal-to-olefin plant is mostly postponed to the third quarter. The 200,000-ton olefin plant in Shandong Daze restarted in mid-April. The olefin plant in Gansu and Xinjiang is scheduled to be put into operation at the end of the second quarter. Therefore, the start of domestic olefin plant will remain strong in the second quarter. , The demand is expected to be good, and overall a small increase is expected.
In summary, in the context of a significant increase in domestic coal prices, the cost of coal-to-methanol is clearly supported. At the same time, the introduction of new methanol production capacity is slower than expected, superimposed on the implementation of dual energy consumption control policies in major coal provinces (regions) such as Inner Mongolia and Shaanxi, methanol supply is expected to weaken. In the case of excessive overhauls of overseas methanol plants, the pace of methanol removal in domestic port areas is good, the advantage of low inventory continues, and the replenishment cycle continues to be postponed. Therefore, the future market outlook for the methanol 2109 contract price will continue its steady upward trend. It is recommended that investors continue to maintain a biased mindset.
Source: Chemical Network
