China methanol market analysis, H1 2018
June 20, 2018
Introduction
Shandong (JLC), June 20,2018–China methanol market prices were volatile in H1 2018, with low point at CNY 2,000/mt and high point at CNY 2,600/mt. Ports in East China also experienced low inventory level and high price spread between imported and domestic goods.Prices in North west China, Shandong, and East China ports changed within CNY 1,000/mt in H1 2018.
1. Volatile prices and more trading opportunities
China methanol market prices showed a N-shape trend in H1 2018, and prices reached high points in January and mid-May of 2018, respectively. Market price fluctuation period shortened from the previous 3-4 weeks to 2-3 weeks. Against this backdrop, trading opportunities also increased noticeably in China methanol market.
| China Methanol Prices in Recent 5 Years | ||
| Years | Price (CNY/mt) | Price Change Spread |
| 2013 | 2,500-4,000 | 1,500 |
| 2014 | 1,800-3,100 | 1,300 |
| 2015 | 1,700-2,600 | 1,100 |
| 2016 | 1,700-3,300 | 1,600 |
| 2017 | 2,200-3,800 | 1,600 |
| H1 2018 | 2,100-3,700 | 1,600 |
2. The methanol market operated out of market insiders’ expectation amid higher risk
The overall methanol prices were high in China in 2018. Considering the newly-added capacity at home and abroad in late 2017 and the stable demand, the methanol market was expected to be weak in 2018. With delayed production of newly-added units and low stockpile at ports,prices of both spot goods and far-month paper goods rose, leading to unilateral risks.