In July 2019, the domestic methanol market declined broadly. According to the price monitoring of business associations, the average domestic methanol price was 2178 yuan/ton at the beginning of the month, and 1970 yuan/ton at the end of the month. The average domestic methanol price dropped by 9.55% in the month, and the price fell by 29.49% compared with the same period last year.
II. Market Analysis
Products: The domestic methanol market continued to decline in July, with some markets touching the low point from the beginning of 2016 to the present, and most of the mainland markets fell below 2000 yuan/ton. The industry is pessimistic because of the concentrated release of bad news such as increased import arrivals and weak downstream demand. Towards the end of the month, local markets stopped falling and rebounded. In terms of new domestic methanol to olefins, the 600,000 tons/year MTO plant in Jiutai, Inner Mongolia, was temporarily shut down for 3-5 days on the 21st day; the 600,000 tons/year MTO plant in Chengzhi Phase II, Nanjing, was commissioned at the end of June; and the 1.8 million tons/year MTO plant in Zhongan Union produced MTO-grade methanol on July 11, and MTO plant was subsequently put into operation.
Industry chain: formaldehyde: This month, the formaldehyde Market as a whole is running lower. The upstream methanol market continued to decline this month, many markets have fallen to new historical lows, the cost is difficult to support the formaldehyde market, coupled with environmental impact, the formaldehyde market started unstable, the overall start-up reduced, the downstream market in the later part of this month is a large-scale shutdown, the overall turnover is light, formaldehyde enterprises inventory pressure increased, big. Some enterprises offer downward. Dimethyl ether: In July, the market price of dimethyl ether fluctuated and changed obviously. In the first ten days, the price trend is regionalized, but in general, most of the terminal demand remains sluggish under the influence of the traditional “off-season”. Henan Yima, Xinlianxin and other leading enterprises maintain high-load production, the northern market supply is saturated, downstream and traders have a strong wait-and-see mentality. After the “Yima Gasification Plant” incident in mid-July, all four enterprises under the Coal Chemical Company stopped, and the starting rate of domestic dimethyl ether enterprises dropped to 17.66%, which was 3.84% lower than that at the beginning of the month. This led to a sharp rise in prices and a continuous rise in prices. Acetic acid: This month, the domestic acetic acid market ushered in a turning point. As the current market is in the traditional off-season, leading to the beginning of the month, all parties in the market for acetic acid fell significantly, a large number of signatures belong to the empty list state, and the overall start-up of domestic acetic acid plant high, the market supply continues to increase, aggravating the industry’s bullish attitude, acetic acid Market Trading slowly in the stable weak market.
Industry: According to the price monitoring of business associations, in July 2019, there were 7 kinds of commodities rising annually in the energy sector, including 4 kinds of commodities with an increase of more than 5%, accounting for 25% of the monitored commodities in the sector; the top three commodities were MTBE (12.29%), diesel (8.34%) and gasoline (8.07%). There are 9 kinds of commodities falling annually, and 2 kinds of commodities falling by more than 5% accounted for 12.5% of the monitored commodities in the plate. The products of the first three declines were methanol (-9.55%), petroleum coke (-6.15%) and Brent crude oil (-2.75%). This month’s average rise and fall was 0.98%.
3. Future Market Forecast
Business Cooperative Viewpoint: On the positive side, the installations overhauled in August include Xianyang Chemistry, Guotai Ordos, Baogang Inner Mongolia and Shenhua Ning Coal Phase II projects; the demand for methanol is expected to increase in August during the orderly construction of new MTO installations; the profit of products such as formaldehyde, dimethyl ether and MTO will be affected by the continued low price of methanol. It’s obviously getting better. On the negative side, the domestic methanol industry started to maintain a high level as a whole. In August, imports were estimated to be around 850,000 tons, and the market supply was abundant. Safety and environmental protection inspections continued to be rigorous, and local market terminal enterprises were affected by production reduction or parking, which was not conducive to methanol consumption. Some domestic MTO enterprises requiring external purchases of methanol had maintenance plans, such as Shenghong, Jiangsu Province. Shenhua Yulin and other enterprises. The current situation of excessive supply and demand of methanol is the main reason that leads to the continuous decline of the market and approaching the methanol production line. The continuous stringent national environmental protection and safety supervision is the main logic leading to the reduction of traditional downstream demand. With the approaching of the 70th anniversary of National Day, environmental protection and safety supervision is not likely to relax. Analysts suggest that focusing on whether there is a reduction in supply and changes in trade sentiment are factors that have reversed the situation, focusing on the start-up of natural gas-to-methanol and coal-to-methanol plants.
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