Starting in July, there is a New Round of Changes in Methanol Prices in Many Regions

Since late June, the Chinese methanol market has shown a relatively strong performance, with prices rising to varying degrees in many regions. The mainland market has experienced stronger upward momentum compared to the port market. According to monitoring data as of June 21st, the closing prices in Taicang ranged from 2075 to 2095 RMB/ton, with an increase of 45 RMB/ton since June 15th. In Shandong, prices rose by 100-130 RMB/ton to the range of 1980-2040 RMB/ton. Prices in Shanxi increased by 120-130 RMB/ton to the range of 1870-1920 RMB/ton. Shaanxi and Inner Mongolia saw price hikes of 50-120 RMB/ton, with ranges of 1720-1850 RMB/ton and 1720-1780 RMB/ton, respectively.

It is evident that the mainland market has seen a more significant increase compared to the port market, with mainland prices rising by 5%-7% and Shanxi witnessing a 7% surge. In contrast, the port market only experienced a 2.21% increase. The factors influencing the rise in China’s domestic methanol market in late June can be attributed to both macro and micro factors:

Strong expectations of positive macroeconomic policies supporting commodity prices

Amidst the backdrop of weaker-than-expected economic momentum in the second quarter and macroeconomic indicators such as employment and prices indicating a growth rate lower than the potential, the People’s Bank of China announced a 10 basis points reduction in the 7-day reverse repo rate to 1.9% on June 13th. This marked the first rate cut since August 2022. In addition, the National Interbank Funding Center announced a 10 basis points reduction in the loan prime rate (LPR) on June 20th, with the 1-year LPR at 3.55% and the LPR for 5 years and above at 4.20%. The frequent “rate cuts” by the central bank and the fiscal counter-cyclical adjustment measures have slightly reversed the market’s bearish sentiment. As a result, the Wenhua Commodity Index has rebounded strongly since June 13th, reaching 175.92 points by June 19th, an increase of 10.2 points from the low point in early June.

Rebound in coal prices, supporting the cost side of methanol production

Starting from mid-to-late June, the significant rise in temperatures in northern regions has led to a noticeable turnaround in coal consumption in the ports. With active replenishment from the midstream and downstream sectors, both pithead and port coal prices have gradually stabilized and rebounded, improving market sentiment and promoting positive market conditions. Additionally, a coal mine accident occurred in Shanxi on June 19th, which slightly affected local coal supplies due to stricter safety inspections in various regions. As of now, the price of 5500 kcal non-power coal in Inner Mongolia ranges from 570 to 610 RMB/ton, while in Shaanxi, the price of 5800 kcal coal ranges from 640 to 690 RMB/ton, showing an increase of 40-70 RMB/ton since June 15th. With the rise in coal prices, methanol production costs have been supported, which has driven buying interest in the methanol market. Furthermore, coal mine accidents have occurred frequently in Inner Mongolia from January to May this year, so it is necessary to closely monitor the impact of increased safety inspections on coal supply.

Different performance between traditional downstream and olefin demand

Currently, the seasonal decline in traditional downstream consumption is gradually becoming evident, coupled with the impact of industrial plant maintenance, leading to overall moderate demand for methanol. However, the restart of Lu Xi olefin plants and the stimulation from the external procurement of raw materials by coal companies in Northwest China have resulted in increased demand for methanol in the mainland olefin sector, thereby facilitating smooth methanol shipments in the mainland. During this period, the port market faced bearish factors such as ample arrivals leading to accumulated inventories and the suspension of Xingxing olefin plants. Consequently, the overall pace of price increases in the port market was slightly cautious. In addition, as the Dragon Boat Festival holiday approached in late June and with a strong market trend, traders focused on short covering and downstream pre-holiday stocking/replenishment, further driving the rapid increase in methanol prices. For example, during the three working days from June 19th to June 21st, prices in the production areas of Shaanxi and Inner Mongolia rose by 80-130 RMB/ton, and during this period, trade-transacted prices also increased.

In summary, with the convergence of these three factors and the recovery of methanol prices from the previous deep decline, along with improved market sentiment, the spot methanol market has shown a relatively strong rebound. Looking ahead to the post-holiday period, based on the good overall upstream shipments and destocking, the continued fermentation of positive macroeconomic policy regulation, the release of seasonal coal demand supporting coal price rebound, and other factors, it is expected that the methanol market will continue to consolidate its strength. However, the port market may be slightly weaker than the mainland market due to the resumption of supply from Iran and the ample arrivals of ships.


More Posts:

bulk creatine monohydrate 6020-87-7 Creatine monohydrate powder

The Production of Creatine Monohydrate

Creatine Monohydrate is a widely recognized and utilized supplement in the fields of sports nutrition and health. The production of creatine monohydrate involves a series

creatine monohydrate

New Creatine Monohydrate Product

In the field of modern fitness and sports, creatine monohydrate has attracted much attention for its excellent muscle growth and strength improvement effects. As a

creatine monohydrate manufacturer

What is Creatine Monohydrate

What is Creatine Monohydrate Creatine monohydrate is one of the most researched supplements, 70% of studies show that creatine monohydrate is a significant enhancer (performance

Send Us A Message