[Foreword]: This week, the overall domestic methanol market showed a volatile and slightly stronger trend, though the inland and coastal markets exhibited some divergence. The coastal methanol market first strengthened and then weakened, while the inland methanol market initially weakened and then strengthened.
I. Overall trends in regional methanol markets are consistent, yet show some divergence
During the week, influenced by macro sentiment, the overall domestic methanol market displayed a volatile and slightly stronger trend. However, looking at the different phases, the inland methanol market performed weakly at first and then strengthened, while the coastal methanol market performed strongly at first and then weakened.
At the beginning of the week, changes in the US-Iran situation caused a collective upward movement across bulk commodities. Additionally, the coastal methanol market was affected by weather conditions, which delayed the unloading of foreign vessels and slightly postponed the expected rapid increase in methanol import supply. Consequently, the volume of methanol available for circulation in the coastal market remained relatively low in the short term, providing support to the short-term methanol market. During the same period, although multiple methanol plants in inland areas underwent maintenance, there was no improvement in downstream buying interest, making it difficult to support methanol price increases. Therefore, some inland markets still performed weakly.
Later, as the macro impact weakened, the market retreated. Coupled with a very concentrated schedule of waiting foreign vessels and arrivals in the next cycle, the unloading speed became the main factor affecting the extent of inventory accumulation. The coastal methanol market was thus expected to experience a period of rapid inventory buildup. Under this influence, the basis of the methanol market within the month also weakened quickly. During this phase, some downstream sectors in the inland methanol market started external procurement, driving up prices in the inland methanol market.
II. Methanol supply expected to increase
Recently, domestic methanol supply has been gradually decreasing due to maintenance at multiple methanol plants. It is expected to gradually increase again as the idled plants resume operations, but the specific impact still needs to be assessed in relation to factors such as profitability.
Looking at import supply, due to weather conditions this week, the unloading of some foreign vessels was delayed, leading to a significant increase in floating storage volume. Moreover, with a concentrated schedule of foreign vessel arrivals in the middle of the month, import volumes are expected to see a phased and noticeable increase.
III. Demand off-season likely to remain weak
Recently, several acetic acid units have been shut down for maintenance, and some olefin units in the coastal areas have also planned maintenance. In addition, with frequent rainfall in many parts of the country and the traditional downstream off-season underway, overall downstream demand remains weak. However, attention should be paid to the possible impact of downstream external procurement activities on regional methanol markets following changes in supporting unit configurations.
IV. Summary
From a fundamental perspective, domestic methanol supply is expected to increase, while downstream demand remains weak. However, it is necessary to monitor the impact of improved downstream profitability on their operating rates and buying interest, which in turn could affect methanol prices. Additionally, attention should be paid to the influence of macro changes on the marginal supply-demand expectations for methanol.
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