Futures Daily
last week,MethanolThe overall price showed a “V”-shaped trend. The price fell back at the beginning of the week and rebounded at the end of the week. However, after sorting out the fundamentals of methanol, the author believes that the fundamentals of methanol lack upward driving force in December, and the current MTO profit is still a large loss. It is expected that the driving force for the price to continue to rise is not strong.
The probability of supply-side decline is small
Recently, the profit of coal-to-methanol has been greatly restored from -850 yuan/ton to -500 yuan/ton. Last week, domestic coal-to-methanol production increased from 69.3% to 70.79%. Considering that methanol manufacturers are generally unwilling to stop their vehicles in winter, and the gas restriction in Southwest China will begin in early December this year, it is expected that domestic methanol production will remain around 70% before the gas restriction. At the same time, Ningxia Kunpeng has not yet produced products. If it can be produced normally in the near future, it will increase its new supply by about 30,000 tons in December. In addition, Ningxia Baofeng may postpone the start of production until 2023.
In terms of imports, the port was closed again due to the weather last week, resulting in a slow unloading speed of methanol. It is expected that some cargoes in November will be postponed to unloading in December. In addition, with the recent restart of Bushehr and kaveh units, the start of construction in November has increased compared with October. At present, it is expected that methanol imports in December will increase month-on-month. On the whole, although the start of domestic methanol production in December may drop sharply due to the impact of gas restrictions in the southwest region, imports are expected to increase in December, and Ningxia Kunpeng may release production. Therefore, it is expected that the probability of a sharp decline in methanol supply in December is small.
It is difficult to have a significant increase in the demand side
In terms of MTO, it is heard that the inspection of Ningbo Funde has been postponed to November 28, and whether Yangmei Hengtong will be inspected is still waiting for the results of the negotiation. At present, although the profit of MTO has been slightly restored, it is still suffering a large loss. It is expected that the MTO equipment that was shut down in the early stage is less likely to resume production in the near future. In addition, it is necessary to pay close attention to the commissioning of Shenghong Refining and Chemicals. If the 1.1 million tons of ethylene can be operated stably, it will weaken the demand for some of Shenghong’s external methanol production. If the overhaul of Ningbo Funde, Yangmei Hengtong and the commissioning of Shenghong Refining & Chemical can be fulfilled in the near future, even if the MTO units that have been shut down in the early stage can be restarted in December, it is difficult to see a significant increase in MTO demand in December.
In terms of traditional downstream, the downstream start of methanol increased slightly last week. Among them, the start-up of formaldehyde increased from 30.67% to 31.56%, the start-up of acetic acid increased from 73.68% to 75.23%, the start-up of MTBE increased from 50.91% to 51.53%, and the start-up of dimethyl ether increased from 11.55% to 11.73%. Considering that December will enter the off-season of demand as the temperature drops, it will be difficult for the traditional downstream construction to increase significantly at that time.
Port inventories are accumulating
In the first three weeks of November, methanol inventories at ports accumulated at low levels for a while. Last week, 55,100 tons to 512,000 tons of methanol inventory at the port dropped sharply, mainly due to the drop in unloading due to the closure of the port. Considering the expected increase in methanol imports in December and the possibility of overhaul in Ningbo Fude, it is expected that it will be difficult to reduce the port inventory in December. Recently, the inventory of methanol manufacturers in the mainland has continued to accumulate to a relatively high level over the years. Considering that the domestic production is likely to remain high before the gas restriction, and the demand side is unlikely to improve significantly in the short term, it is expected that methanol may continue to accumulate at ports in the market outlook.
On the whole, although the base difference of methanol has been deeply discounted by 300 yuan/ton, considering that the overall supply and demand situation in December has not fluctuated much, it is expected that the price of methanol will continue to rise. In terms of operation, it is not recommended to chase high, and we need to pay attention to the commissioning of Shenghong Refining and Chemical, the start of MTO equipment, and the situation of gas restrictions at home and abroad.(Author unit: Dadi Futures)
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