China Methanol Import Volume Saw a Increase in Q2
China’s methanol import volume was estimated at 1,191.2kt in June 2022, down 8kt or 6.65% M-O-M but up 68.3kt or 6.08% Y-O-Y. The monthly average import volume was estimated at 1,171.3kt in Q2, up 312kt or 36.06% Q-O-Q. Against the weak demand in the global market, the international methanol suppliers enlarged spot sales, especially the volume to China.
1. The import volume from certain country in the Middle East hit a historic new high.
It is well known that the methanol resources of certain country in the Middle East mainly flow into India and China. In Q1, 2022, besides the cargoes from the Middle East and Southeast Asia, some resources from certain country in Europe and South America were also squeezed into India, which reduced the consumption of methanol from certain country in the Middle East. Facing higher inventory, it had to sell more cargoes to China. In June, the import volume from certain country in the Middle East was predicted to reach 900kt, reaching a new high since October 2020. However, the import volume from other origins declined from last month, especially that from certain country in South America and Oman, and there were still few cargoes from Southeast Asia.
2. The import volume to Tianjin kept increasing.
In June, the volume of imported cargoes arriving in South China and Tianjin continued to increase, what that in Jiangsu and Zhejiang had no large changes. Influenced by the tighter tank capacity in Jiangsu and higher prices in South China, some importers transferred cargoes to South China, especially Guangdong and Quanzhou. The import volume to Tianjin was estimated at 50kt in June, up 30kt or 150% M-O-M, which was mainly because of the stable operation of the important MTO unit in Tianjin and the decline in import cost. Players should pay close attention to the operation of this MTO unit in the future.
3. The import volume may drop temporarily due to expected tight transport capacity.
With import ships pouring into China, logistics capacity is a concern. Although the transport capacity of certain country in the Middle East has been lifted constantly in recent years, but China's major terminals have limited berthing capacity. Large ships usually need to go through the previous port for load reduction and then can smoothly enter the next port to unload. As a result, once import ships arrive at ports intensively, it will cause port congestion and influence the shipment and unloading time of next voyage. To a certain extent, it will affect the accuracy of import volume prediction, and also lead to a decline in import volume temporarily.
For July, the import volume from certain country in the Middle East is predicted to remain at a high level with intensive shipments. Given the demand in the global important consumption areas can hardly improve, the import volume from South America and Saudi Arabia is also expected to further increase. The import volume is estimated at around 1,240kt in July, up 10.43% Y-O-Y. On the whole, China’s methanol import volume in 2022 may be higher from last year and is predicted at 11,800-12,000kt.
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