In the second half of the year, domestic methanol demand is improving. Even if the methanol start-up load continues to rise, domestic methanol supply still shows a tight trend. This is an important reason why methanol prices are still oscillating and rising in the context of the sharp decline in international crude oil.
Affected by the continued decline in international crude oil prices, the price of methanol in overseas gas heads continued to decline, and cheap imported methanol began to pour into the country, and methanol imports have remained at a high level of 1 million tons per month. At present, the price of imported methanol in RMB is around 1896 yuan/ton, which still has a slight advantage compared to the spot price in East China. Not only that, the shipping schedule issue that previously restricted imports has recently been resolved. There is a phenomenon of ships waiting for cargo at the port, and Iranian goods continue to flow into the country.
In terms of domestic methanol supply, domestic coal-to-methanol plants continued to suffer losses due to the suppression of overseas low-priced methanol, but domestic methanol supply continued to rise since July. As of November 3, the domestic methanol operating load was 76.05%, an increase of 15 percentage points from the low point of the operating load in early July, and the market supply has gradually increased. In November, due to the limitation of winter gas supply, the methanol operating load of Southwest Gas Head, which has a good profit, will gradually decrease. In the near future, the production of 900,000 tons of coal plants in ancient jade in Tangshan, Linhuan in Anhui, and Shenmu in Shaanxi will resume production. In the future, domestic methanol supply will remain at a high level. The main variable is the maintenance of the southwest gas head unit.
Since August, with the release of domestic demand and high MTO profits, the domestic MTO device load has remained at a level of about 90%, which is significantly higher than the same period in previous years. In October, the average domestic MTO operating load was 93.43%, a slight decrease from September, but significantly higher than the same period in previous years. At present, in addition to several sets of devices that have been parked for a long time, Cornell has stopped, and the devices of Shenghong and Zhongtian have a maintenance plan, and the starting load of MTO will gradually decrease in the later period. Jiangsu Sierbang plans to overhaul in December. Therefore, as the end of the year approaches, the demand for olefins will gradually fade, and the load of MTO operations is expected to further decline in the later period.
In terms of traditional demand, formaldehyde, dimethyl ether, glacial acetic acid, and MTBE are all in a meager profit state. However, due to sufficient demand, the operating load of the market is still at a relatively high level. However, as the winter enters, the traditional downstream consumption of methanol will fade to varying degrees. In addition, the current production and operation conditions are general, so the follow-up traditional downstream demand for methanol may decline.
Stimulated by the good demand in the East China MTO market, domestic methanol port inventories have continued to decline since July. As of October 29, the domestic methanol port inventory was 908,700 tons, a decrease of 148,400 tons from the high point at the end of July, a decrease of 14.04%. Among them, East China port inventory was 738,000 tons, a decrease of 127,000 tons compared with the end of July, a decrease of 14.68%; South China port inventory was 170,700 tons, a decrease of 21,400 tons from the end of July, a decrease of 11.14%. However, due to the concentration of imported goods arriving at the port, the domestic methanol port inventory rose sharply from the previous month, up 143,500 tons from October 22. From the current point of view, there is a certain contingency in the increase in methanol port inventory, and it cannot be arbitrarily considered that it has entered the accumulation cycle. However, with the reduction of MTO load in East China and the influx of imported sources, it is inevitable that methanol inventory pressure will increase.
In summary, the Southwest Gas Head methanol plant is expected to reduce the load, and the subsequent methanol supply is likely to decrease. There is still room for import arbitrage, and domestic methanol imports will remain high. At present, the port inventory is low, which forms a certain support for methanol prices. However, the MTO device has been overhauled one after another, the traditional downstream has entered the off-season, and the weakening of the demand side determines the probability of the subsequent decline in methanol prices. For the MA2101 contract, it is recommended to place an empty order backed by 2100 yuan/ton.
