As a widely used chemical, methanol is used to produce many different kinds of chemical products, such as polymers, solvents and fuels. Among them, domestic methanol is mainly made from coal, and imported methanol is mainly divided into Iranian sources and non-Iranian sources. The supply side drive depends on the inventory cycle, supply increment and alternative supply. As the largest downstream of methanol, MTO demand has a crucial impact on the price drive of methanol.

1.Methanol capacity price factor

According to data statistics, by the end of last year, the annual capacity of the methanol industry was about 99.5 million tons, and the annual capacity growth was gradually slowing down. The planned new capacity of methanol in 2023 was about 5 million tons, and the actual new capacity was expected to account for about 80%, reaching about 4 million tons. Among them, in the first quarter of this year, Ningxia Baofeng Phase III with an annual capacity of 2.4 million tons has a high probability of putting into production.
There are many factors that determine the price of methanol, including supply and demand, production costs and global economic conditions. In addition, the price of crude oil used to produce methanol will also affect the price of methanol futures, as well as environmental regulations, technological progress and geopolitical events.
The price fluctuation of methanol futures also presents a certain regularity. Generally, the price of methanol in March and April of each year forms pressure, which is generally the off-season of demand. Therefore, the overhaul of methanol plant is also gradually started at this stage. The June and July are the seasonal high of methanol accumulation, and the off-season price is low. Methanol fell mostly in October. Last year, after the National Day in October, MA opened high and closed low.

2.Analysis and forecast of market conditions

Methanol futures are used by a variety of industries, including energy, chemicals, plastics and textiles, and are closely related to related varieties. In addition, methanol is the key component of many products such as formaldehyde, acetic acid and dimethyl ether (DME), which have a wide range of applications.

In the international market, China, the United States, Europe and Japan are the largest methanol consumers. China is the largest producer and consumer of methanol, and its methanol market has an important influence on the international market. China’s demand for methanol has continued to grow in the past few years, driving up the price of the international market.

Since January this year, the contradiction between methanol supply and demand has been small, and the monthly operating load of MTO, acetic acid and MTBE has increased slightly. The overall starting load at the methanol end of the country has decreased. According to statistical data, the monthly methanol production capacity involved is about 102 million tons, including 600000 tons/year of Kunpeng in Ningxia, 250000 tons/year of Juncheng in Shanxi and 500000 tons/year of Anhui Carbonxin in February.
In general, in the short term, methanol may continue to fluctuate, while the spot market and disk market are mostly performing well. It is expected that methanol supply and demand will be driven or weakened in the second quarter of this year, and MTO profit is expected to be repaired upward. In the long run, the MTO unit’s profit elasticity is limited and the pressure on PP supply and demand is greater in the medium term.