Methanol: how about the fundamental performance of futures falling in succession

At the beginning of the week, the domestic methanol market fell, and methanol futures fell for four consecutive days, nearly 300 points lower than the previous high. The thermal coal in Bohai Rim ports continues to accumulate, some ports are under great pressure to dredge ports, and traders are more willing to ship. The implementation of coal price regulation and supervision policies by relevant departments has also had a certain impact on their mentality. Recently, the price of thermal coal in ports and main production areas has declined. As a kind of coal chemical industry with active trading, methanol is closer to the energy property in recent years.

From today's point of view, it is difficult for Daqi region to ship goods at the current price. As most enterprises have not set prices yet, most trade businesses have a wait-and-see mentality, and the transfer price has declined slightly, but it is not obvious. At present, the price difference between the northwest and the disk has fallen from the previous high, and the freight has not been significantly corrected this week, but the narrowing of the mainland port space has also increased the trading pressure.

In terms of ports, the futures fluctuated with the energy end, and the spot fundamentals changed little. As the actual demand of Bohai Chemical has not yet been revealed, the supply and demand performance is still a little loose, and the spot methanol fell with it. But the home price of chemical coal is relatively strong. With the methanol price approaching the cost boundary, the market trading intention has recovered, and the port basis has strengthened against the trend since the end of last week.

It is reported that in May, 2022, China's methanol import volume was 1.1992 million tons, a year-on-year increase of 10.23% and a month on month increase of 7.82%. The total import volume from January to may totaled 4.9368 million tons, accounting for 44.01% of China's total methanol import volume last year. The actual import volume in may hit a new high as expected. Due to the olefin overhaul at the port and the negative reduction of low profits, as well as the impact of the early epidemic on the land transportation pick-up volume, the shortage of tank capacity at the port also led to the weakening of the spot basis in most of June, and there was great selling pressure on those who had goods. At the same time, China's methanol export volume in May was 26400 tons, an increase of 66.67% year-on-year. According to the situation, some goods were re exported to Southeast Asia after meeting the freight. Due to the overhaul of Iran's Kaveh in May, the import volume in the middle and late June should fall slightly compared with that in May. However, with the increase of Iran, the port space opened the import link after the US dollar was linked, and the negotiation intention of the operators was better than that in the early stage. It is estimated that the import volume in June will be around 1.1 million tons, which will still put some pressure on the port.

Recently, methanol has been greatly affected by coal chemical industry, and the downstream products are relatively strong. The weekend safety accidents may stimulate the downstream products of related olefins, so MTO profits have been slightly repaired since last weekend. But it hasn't left the interval yet. At present, the operating rate of olefin unit is difficult to rise under the profit. It is understood that there is still an integrated unit maintenance plan in Northwest China. However, only looking at the downstream of methanol to olefins, there is still a possibility of high start-up in July.

To sum up, it is difficult for the coal to meet the peak in summer to fall significantly, and some losses of coal to methanol enterprises are still the solid support under methanol, so the crude oil and related prices in the peak season of foreign consumption may not be able to be controlled. Although the demand may be difficult to promote the market in the short term under the influence of high temperature and rainy season, the valuation has returned to a relatively low level after the recent methanol price correction. In the future, whether the methanol market is trading energy attributes or reflects the fundamental situation, we need to pay attention to the actual performance of downstream demand.