Differences and Similarities of Global Methanol Price Uptrends

First, let’s look at the similarities. With the methanol prices kept dropping to the bottom, the market players strongly intended to stop the downtrend and profit losses. Meanwhile, the traders and downstream users went bargain-hunting and stocked up for the upcoming festivals. In addition, there were declines in the operating rates or unit maintenance in some areas. Under such a background, the players with bullish attitudes raised the offers repeatedly. Moreover, the crude oil price surge caused by the attack in Saudi Arabia also stimulated the market sentiment. Therefore, the methanol prices rose roundly in the middle of September.

However, except the restocking on rigid demand, the deals at new offers were still limited in most Asian regions, as the spread between the bids and offers remained large. For the markets in China and the U.S., there were some differences. In China, the newly added phase II CTO unit at Ningxia Baofeng Energy purchased methanol from the market actively; Hualu Hengsheng also purchased spot methanol moderately; Datang reduced its weekly sales volume; the traditional downstream users and traders purchased on rigid and speculation demand. In such a climate, the methanol sales were smooth in the major producing areas, and the prices kept increasing with the inventory slipping quickly. This also boosted the coastal methanol market. In addition, the methanol output at some 150kt/a units in Jincheng could be cut by 30% from September 25, so the methanol supply in Shanxi was expected to decline further.

In the U.S., influenced by some accident on September 21, one 1,300kt/a methanol unit of Celanese was cut the operating rate, and its matched 1,200kt/a acetic acid unit and 450kt/a VAC unit were shut down for maintenance unexpectedly. Although local methanol supply has shrunk somewhat since mid-August (There are methanol units with the capacity of 2,750kt/a are shut or running at low loads), the demand decrease will curb the uptrend of the methanol price, as the methanol consumption from the acetic acid industry takes up around 19% of the total in North America.

Overall, the methanol supply in most global markets is still comparatively sufficient, and there are profit-taking operations. In addition, the unit maintenance or restart also influenced the market sentiment. With the prices rising persistently, the spot market will face higher risks. SCI predicts that China’s methanol prices may continue to rise slightly and then move sideways, and for other regions in the world, the methanol prices may fluctuate at highs in the near term.

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