[Lead] In the first half of the month, due to persistently low import volumes, the available circulation of methanol in the coastal market remained low. Driven by some short-covering demand, basis levels surged rapidly, pulling inland methanol prices slightly higher. At the beginning of the week, news of changes in the international situation and key waterways for international logistics altered expectations for supply-demand structures, leading to a rapid shift in market sentiment and a swift downturn in the methanol market.

I. Sentiment in the methanol market reversed and declined during the week

Owing to persistently low import volumes and maintenance shutdowns at some domestic methanol plants, the available circulation in China's methanol market remained low from late May through mid-June, with prices trending on the strong side overall. The coastal methanol market was particularly boosted by some short-covering demand.

II. Ongoing tug-of-war, with international logistics playing a key role

From the perspective of current domestic fundamentals, methanol inventories in China are low, and the available market circulation is also low. Although floating storage and inventories at import source regions are high, transportation of goods to China takes a certain amount of time. Therefore, assuming the key waterways fully reopen, the tight supply of spot methanol within the month is already a foregone conclusion, providing some support to the near-term methanol market and keeping basis levels firm.

Looking further out, international logistics conditions become critical. If the key waterways can be opened smoothly, China's methanol import volumes are expected to recover relatively quickly from July onward, and market sentiment will shift accordingly. Domestic methanol prices are likely to continue declining. Additionally, under the combined influence of factors such as downstream profit margins and downstream feedstock inventories, the market supply-demand structure will likely undergo changes, adjustments, and rebalancing. If special circumstances arise, the supply-demand structure outlook will present a different picture.

III. Summary

The near-term supply-demand structure is largely set, with specific attention needed on the unloading speed of foreign vessels. Overall, the tight supply of spot methanol within the month will persist, providing some support to the market. For July and beyond, the international situation and the recovery of international logistics will become key factors, and close monitoring of their actual developments is required in the near term.