Supply-Demand Changes Hit Methanol Market
March 9, 2018
The supply and demand changes in methanol market attracted more attention, especially methanol producers in Northwest China suffered bad sales amid subdued demand, though lower transportation freight promoted them to maintain firm offers.
As of April 9th, methanol price in Shandong, Hebei, Henan and Shanxi dipped by CNY70/mt, CNY80-120/mt, CNY50/mt and CNY80-100/mt from that in end-March, respectively. As aresult, methanol producers in Northwest China, the main producing area, also followed suit to lower selling prices.
Output growth will attract more attention after influences of unit maintenance weakening.
According to JLC’s statistics, in the mid-to-late March and early April, some methanol producers in Northwest China, Shaanxi and Yunnan shut units down for maintenance, and most of them would restart in mid-to-late April to early May. Therefore, market players should keep an eye on influences on methanol market caused by unit maintenance.
There will be some producers to undertake maintenance in late April to early May, including Xinjiang Guanghui, Yulin kaiyue Coal Chemical, China BlueChemical and Yunnan Yuntianhua, boosting methanol market a little. In addition, some producers are likely to shorten maintenance time in light of better profits for the time being.
Furthermore, with the weather warming up, the output increase by some coke oven gas to methanol projects in North China should be paid attention.
Natural gas-based methanol unit operation changes promoted by PetroChina’s gas limitation policy
PetroChina’s 23 gas depots began gas injection after the start of gas injection of Xiangguosi gas depot under PetroChina Southwest Oil & Gas Field Company on April 6th, guaranteeing natural gas supply.(Xiangguosi gas depot is the one with the largest daily gas production capacity in China. In 2018, PetroChina plans to inject 8.6 billion m3 of gas for underground gas depots, of which 1.72 billion m3 will be injected to Xiangguosi depot.)
Some chemical fertilizers and methanol plants in the Sichuan-Chongqing region have also received notification of gas limitation, and some producers said gas limitation will reach 20%-30%. as for methanol industry, some producers in the Sichuan-Chongqing region that PetroChina supplies gas for cut run rate marginally by 20%, exerting few influences on local methanol industry.
There will more MTO unit maintenance in Q2, 2018.
The methanol-to-olefin (MTO) industry is one of the major downstream drivers of methanol demand in China. Meanwhile, since 2017, the inverse correlation between olefin operation and methanol market have been keeping strong. Thus, MTO project is still one of the key factors for industry research.
In early April, Shenhua Yulin’s MTO unit with capacity of 600,000 mt/yr has shut down for 20-day maintenance. Some olefin units in Zhongtian Hechuang Energy has shut down. In end April, a MTO unit in Ningbo is expected to be in maintenance. In May, market players should pay attention to demand shrink caused by some MTO unit maintenance in Henan and Jiangsu.