Downstream Profit Growth Supports China Methanol Market Stable-to-Rising
In Q1, 2021, China’s methanol market performed relatively well in spite of loose supply. Mainstream prices slowly rose to a nearly one-year high, and industrial profits improved gradually. SCI considers that besides the influences from macro-environment, supply and demand, the continuous rises in downstream profits was a key factor.
The methanol prices in spot and futures market showed a “V”-shape trend in Q1. Before the Chinese New Year holiday, the overall trading atmosphere was weak influenced by the holiday. After the holiday, boosted by the changes in the macro-environment at home and abroad, the prices of crude oil and most chemicals went up, and methanol prices also increased steadily. However, the real driving force of price rise lied in the internal changes of the industry itself, especially the game between supply and demand as well as the increase in downstream profits.
(Remarks: Sample downstream industries include CTO/MTO, formaldehyde, acetic acid, DME, etc. whose theoretical consumption volume of methanol takes up about 80% of the total.)
In Q1, China’s methanol output was 18,470kt, and the import volume was estimated at 2,600kt. The overall supply inched down by 1.86% Q-O-Q but up 10.6% Y-O-Y.
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