Implicit Factors Behind China Methanol Price Rise
After the National Day holiday, China’s methanol prices showed an obvious uptrend amid many dominant favorable factors, such as the post-holiday restocking demand, continuous destocking at ports, overhauls of some foreign units and controllable inland market supply, etc. Besides, the following points also deserve market players’ attention.
1. The import volume from Iran hit a ten-year new high, but recent loading and shipping of Iranian cargoes were delayed distinctly.
It is known that Iran is the most important methanol import origin for China. The monthly import volume from Iran to China kept rising from 2018 to 2020, as its methanol output increased persistently, following local capacity expansion. According to SCI, the total import volume from Iran expanded to 4723.7kt from January to October 2020, up 49.23% Y-O-Y. SCI estimates that the import volume in October will reach about 810kt, up 18.04% M-O-M and 120.72% Y-O-Y, and the number will hit a ten-year new high. Although the U.S. sanction on Iran worries the market players, the shipment from Iran to China remains normal, and the payment methods of Iranian cargoes have been more flexible and various in recent years. However, the loading and shipment of Iranian cargoes slowed down notably in October, as some Iranian cargoes were forced to change discharge ports due to quality dissatisfaction and the inventory dropped due to the maintenance of some units. It is predicted that the import arrivals from Iran in November will decline.
