China Methanol Supply Keeps Increasing amid Demand Growth
China’s annual methanol operating rate was maintained at 56%-73% in recent three years. Generally speaking, the operating rate will experience relatively large fluctuations in the beginning of the year, the end of the year and Q2, which is influenced by the seasonal and economical factors to a large extent. The fourth quarter and the beginning of each year is the heating season when the residential gas consumption will increase significantly and the industrial gas supply and price will be adjusted. Thus, the operating rate of the natural gas-based methanol units will be affected in Northwest China and Southwest China. The situation is similar in foreign countries. In addition, most units in China’s major methanol producing areas will take overhauls in Q2 and later Q3. For 2020, the national operating rate fluctuated at 55%-71% which was relatively low compared with that in previous years. On the one hand, the global public health event dragged down the methanol demand sharply. On the other hand, the historic low methanol price in Q2 exerted heavy pressure on the marginal cost at most producers at home and abroad.
