China Methanol Import Volume Edges Up in Q3
Introduction: China’s methanol import volume in Q3 edged up from Q2. The resources from South America increased, and more cargoes flowed into downstream plants. In Q4, China’s methanol import volume may see a decline, given the gas supply restriction in the Middle East, limited newly added capacity release overseas and higher import cost, supporting methanol prices to some extent.
According to SCI, China’s methanol import volume was estimated at 1,266.7kt in September, down 1.19% M-O-M. The reasons behind this drop included the tight tank capacity in most coastal tank farms, frequent changes in unloading ports and delays in the arrival of cargoes from South America. Although the import volume in September decreased, the total import volume in Q3 was predicted to rise by 151.7kt or 4.16% from Q2.
In terms of import origin, more methanol resources from South America flowed into China in Q3, as the demand in Europe and the U.S. improved little and China’s methanol prices kept rising from July to early September. The import volume from Trinidad was estimated at 561.5kt in Q3, up 74.02% from Q2, but the resources from Chile and another country in South America decreased. In addition, the import volume from the Middle East and Southeast Asia declined, mainly influenced by local unstable unit operation and logistics issues. The import volume from a certain country in Europe also dropped due to higher import cost.
In Q3, some coastal MTO units experienced shutdowns but were restarted successively in mid-August and mid-September. Moreover, downstream plants increased hedging operations with imported contract resources. Thus, more imports directly flowed into downstream plants in Q3. The proportion of imported methanol to downstream plants rose from 52.05% in Q2 to 58.46% in Q3. Thereinto, 2,220.7kt of imports were delivered to the coastal MTO plants in Q3, with the proportion advancing by 16.98% from Q2. Facing rises in both import and domestic prices, downstream plants have depended more on imported methanol due to its relatively lower prices.
Forecast: In October and November, the import volume from the U.S. may increase, and Southeast Asian suppliers will also fulfill long-term contracts intensively. However, the actual arrival time of cargoes from the Middle East may be influenced by the low transport capacity in the Middle East as well as the tight tank capacity and ship congestion in China. It is predicted that China’s methanol import volume in Q4 may decrease somewhat from Q3, given logistics issues, the gas supply restriction in the Middle East, limited newly added capacity release overseas and higher import cost. Consequently, the decline in the import volume may support China’s methanol prices to some extent.
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