Price Trend

In May 2019, the domestic methanol market showed a strong trend. According to the price monitoring of business associations, the average domestic methanol price was 2174 yuan/ton at the beginning of the month and 2334 yuan/ton at the end of the month. The average domestic methanol price rose by 7.36% in the month, and the price fell by 20.58% compared with the same period last year.

II. Market Analysis

Products: This month, the domestic methanol market showed a strong trend. From the regional point of view, the market trend in central China has been fluctuating, with a slight rise in April. Among them, the market in Henan has increased by about 4.37% and the market in Lianghu has increased by about 3.48%. The trend of methanol market in North China is strong and volatile, and the focus of market transaction has obviously moved upward. On the one hand, the supply of local and main production areas has been reduced due to equipment maintenance. On the other hand, the port imports in the first half of the month were limited, opening up arbitrage space, and some goods were sold directly to Jiangsu. Southwest methanol market shocks upward, fluctuating range of 10-100 yuan/ton. The price of methanol in Northwest China rose from 1810 yuan/ton to 2050 yuan/ton this month. Most of the shipments in Inner Mongolia this month were purchased by traders and sent to local, Hebei, Shandong and other areas. The news of olefin restart and news restart in Jiutai and Datang brought certain support to the local market.

Industry Chain: Formaldehyde: According to the monitoring data of business associations, the domestic market of formaldehyde fell mainly in May 2019. At the beginning of the month, the price of formaldehyde was 1 283 yuan/ton, and at the end of the month, the price of formaldehyde was 1 206 yuan/ton. The price of formaldehyde fell by 5.97% in the month, which was 25.56% lower than that of the same period last year. Dimethyl ether: According to the monitoring data of business associations, the domestic dimethyl ether market fluctuated and fell in May 2019. At the beginning of the month, the average price of domestic dimethyl ether was 3430 yuan/ton, and at the end of the month, the average price of dimethyl ether was 3174 yuan/ton. The price of dimethyl ether fell by 7.44% in the month, which was 31.66% lower than that of the same period last year. Acetic acid: According to the monitoring data of business associations, the domestic acetic acid market declined in May 2019. At the beginning of the month, the domestic acetic acid price was 2716 yuan/ton, and at the end of the month, the domestic acetic acid price was 2580 yuan/ton. The price fell by 4.99% in the month, 52.39% compared with the same period last year.

3. Future Market Forecast

Business Cooperatives Viewpoint: On the positive side, after the forced market in mid-early May, most enterprises in the Mainland have low inventory, relatively ideal pre-sale and low sales pressure; there are still some methanol plants planned to be repaired in June-July, including Shilin, Shenmu, Yankuang Yulin, Xianyang Chemistry and other enterprises; Jiutai MTO plant in Inner Mongolia was upgraded to 6-70% at the end of June, methanol sales were suspended; Luxi, Shandong Province Nanjing Chengzhi Phase II MTO is expected to start production in June-July. On the negative side, the market of dimethyl ether and acetic acid in traditional downstream products continued to decline, and the profitability of enterprises was not good; the import volume in May was estimated to be around 76-780,000 tons, and the arrival of individual cargo at the end of the month was likely to be delayed. The import volume in June is estimated to be around 76-800,000 tons. Affected by safety and environmental protection inspection, some terminal enterprises in local market are affected by production reduction or parking, which is not conducive to methanol consumption. At present, methanol-related information and its own fundamentals are interwoven, the wide fluctuation of international crude oil and the progress of new methanol to olefins increase the uncertainty of the market; therefore, the logic of weak reality and strong expectation will still dominate the market, and attention should be paid to the suppression of MTO profits over methanol. Overall, business methanol analysts expect the methanol market to be cautiously bearish in June, with strong volatility expected in the latter half of the year.