中文
The import volume of methanol in China has shown a significant downward trend recently.
The reporter learned that in October and early November,the average monthly import volume of methanol in China was about 1.3 million tons.However,at the end of November,the import volume of methanol significantly decreased.Iran’s shipment volume is expected to drop to about 700000 tons in November,and the national import volume is expected to be around 1.05 million tons in December,a significant decrease compared to the previous two months.
During the interview,the reporter learned that the main reason for the decrease in China’s methanol imports is the shutdown of Iranian facilities.At present,Iran’s facilities are in a rotating shutdown state with a low operating rate.The gas restrictions this year are earlier than last year,”said Zhou Yutong,an analyst at Yong’an Futures.Iran’s earlier gas restrictions this year are due to fuel shortages and power shortages.From the perspective of supply and demand,another reason for the decrease in Iran’s shipment volume is the high inventory of methanol in domestic ports,resulting in lower profits from methanol imports and a decrease in the willingness to operate Iranian facilities.
In addition,since October,the exchange rate of the Chinese yuan against the US dollar has continued to depreciate,and the cost of methanol imports has also increased.This has led to poor profits from methanol imports,and international traders are more willing to transport tight supply to high priced regions for arbitrage,resulting in a significant reduction in supply to China,”said Zheng Xiyu,an analyst at Guoxin Futures.
Compared with previous years,the overall methanol market this year has shown a decrease in import volume,reduced import profits,and high port inventory.Data shows that from January to October,the cumulative import volume of methanol in China was 11.2902 million tons,of which 1.2272 million tons were imported in October,a decrease of 1.73%month on month and 6.02%year-on-year.In addition,the import profit in the first half of the year was 56 yuan/ton,and for most of the second half of the year,the import profit showed an inverted trend,with an average import profit of-12 yuan/ton for the year.
At present,the domestic methanol import market presents certain volatility and uncertainty,and is affected by multiple factors such as weather,geopolitics,and equipment operation status,making it difficult to maintain stable import volume.”Peng Jiebin,an analyst at Huarong Rongda Futures,said that on the one hand,frequent maintenance of international methanol equipment has led to low production and affected import volume;On the other hand,the expected winter gas restrictions in Iran have led to a decrease in methanol production,affecting supply;In addition,the downstream demand for methanol in China has shown weakness,especially in the traditional consumption sector,leading to a decrease in import demand.
Meanwhile,the global supply flow of methanol has also changed this year.According to Zheng Xiyu,global methanol production capacity will continue to expand in 2024,with new capacity mainly coming from countries such as China,the United States,and Iran.The supply and demand structure in various regions will change,and the overall global supply flow will once again reach balance after adjustment.This year,the situation of supply reduction in Europe has become increasingly evident,with high methanol prices in Europe and international methanol manufacturers inclined to arbitrage in Europe,resulting in a decrease in their willingness to supply to China.
In Peng Jiebin’s view,the reasons for the decrease in import volume in the methanol market this year are more complex.The year-on-year decline in methanol import arrivals may be the result of multiple factors such as geopolitical conflicts,the operation status of overseas facilities,and changes in domestic demand.Due to the continuous reduction in imports,the methanol inventory in Chinese ports has significantly decreased this year compared to previous years,with an average annual value of only 850000 tons,a decrease of 7.3%from the inventory level in 2023.
The reduction in imported methanol will first impact the port market.The current total inventory of ports is 1.2005 million tons,an increase of 233800 tons compared to the same period last year.The reduction in imported methanol will help the ports to reduce inventory.In addition,the reduction in imported methanol will also drive up prices,which in turn will affect the production decisions of domestic methanol enterprises.If the production of domestic methanol is increased to make up for the supply gap,this will result in a reduction in the arbitrage space between ports and mainland methanol,”said Peng Jiebin.
Zhou Yutong believes that the high port inventory has suppressed the basis and valuation of methanol.If the port inventory drops to a low level in the later stage,the valuation of methanol will rise.In this context,methanol prices will show a strong oscillation trend.Similarly,in Zheng Xiyu’s view,the current methanol inventory of representative enterprises in mainland China is also not high,and there is still a demand for external procurement of the newly added Baofeng olefin plant.The price center of the mainland market is rising,which also provides some support for port prices.
In fact,Iran’s early gas restrictions have led to methanol destocking,and the market has already reacted.The price of methanol has risen significantly,and the profit compression of MTO is more obvious.However,the actual inventory is still at a high level and has not yet started to be depleted.Investors can observe the inventory situation in the later stage Zhou Yutong stated that if methanol prices remain high in the later stage and downstream MTO profits are low but inventory turnover is slow,there may be downward pressure on prices.
Looking ahead to the future,Peng Jiebin believes that investors need to pay attention to the risk of oversupply.The continuous increase in domestic methanol supply pressure may lead to price pressure;On the other hand,attention should be paid to the risk of weak demand,as there is limited improvement in downstream demand,especially in the traditional consumer sector,which may weaken price support.At present,port inventory remains high.If the future destocking efforts are not as expected,it may increase the downward pressure on methanol prices,”he said.
In the short term,the import volume of methanol will decrease,but in the long term,with the return of non Iranian plant maintenance and the end of the gas restriction season,there is a possibility of a rebound in import volume,”Zhou Yu said.
From a valuation perspective,there is some support for coal prices in winter,and international methanol supply is decreasing,which may shift the focus of methanol prices upward,”said Zheng Xiyu.