News summary
Rising coal prices strengthen cost support; methanol output rises month-on-monthJungleJackpotJigInventory increased. Downstream demand weakensJungleJackpotJig, the methanol market may be difficult to show an upward trend in the short term, and the market is volatile.
Newsletter text
[The methanol market suffers from the dual impact of cost support and supply pressure] Affected by the increase in the number of suspended mines and the improvement of transportation efficiency, coal prices have accelerated, providing significant support for the cost side of methanol.
Domestic methanol production increased month-on-month due to more restart of production units than overhauling. This week's increase in arrivals to Hong Kong and mainland supply restrictions have led to a significant expansion of the arbitrage space between the mainland and ports. In May, frequent production equipment problems in Iran and insufficient operating rates of units in non-Iranian areas led to a significant reduction in overseas production, and domestic unloading volume fell short of expectations. However, there were many stops for MTO units, and the volume of goods picked up in major reservoir areas in Jiangsu dropped, resulting in a slight increase in port inventories. High prices in the mainland have led to low downstream purchasing willingness, limited actual transaction volume, and correspondingly increased manufacturers 'inventories.
On the demand side, due to negative downstream feedback, the operating rates of MTO units and traditional units have declined, and the pending order volume of methanol production companies has weakened month-on-month.
Although methanol has a long-term structural shortage problem, in the short term, due to negative feedback from the demand side, the arbitrage window from the mainland to ports has opened. Coupled with the decline in port MTO demand, the extreme basis of ports has become reasonable, and it is difficult for the methanol market to show an upward trend. It is expected that the overall trend will tend to be volatile.
