Methanol prices will move downward

In the past two weeks, the main methanol 1301 contract has been contracted in the 2770-2830 yuan/ton range. The author believes that the recent external benefits have been gradually digested, in the case of short-term demand may not be greatly improved, the supply bottleneck is gradually resolved, the possibility of downward revision of the focus of the late transaction is higher.

First, the supply is expected to increase from the period of October to the end of the year, the domestic is expected to have 2 million tons of new methanol production capacity put into operation, the total domestic production capacity will exceed 50 million tons by the end of the year. In August, the domestic production of methanol was 2.27 million tons, and the growth rate from June to August was both above 25%. The domestic output this year is expected to reach 26 million tons, which is still huge compared with the capacity surplus. Ten months ago, several sets of equipment in the northwestern production area were overhauled, and the local supply of goods was tight. However, after the holiday, the northwestern installations were gradually restarted. At the same time, the weather in the country was favorable for transportation in October. It is expected that the supply of goods on the mainland market will restore a plentiful pattern and the upstream supply surface. Support for the market will be weakened.

Second, the demand is still difficult to improve in the short term Although "Jin 9 Silver Ten" has traditionally been the peak season for the consumption of methanol, but Jin Jiu has passed, the downstream demand is not satisfactory. Among them, affected by the autumn harvest farmers, the operating rate of the formaldehyde industry increased slowly, and its exports of downstream plates 7 and 8 decreased by 20% in the second month, and the latter period was not optimistic; DME was supported by LPG in the near future. However, companies are currently on the protection line. , coupled with the increase in factory inventory, the latter may face reduced production. At the end of the year, two sets of olefins production projects with a total capacity of 1.2 million tons will be put into operation in East China. However, the initial output of the new plant will be limited. It will be difficult to significantly affect methanol demand in East China in the short term, and the market is currently lacking continuous transactions. With the phased procurement ending, Sales pressure will again surface. On the whole, the early-stage rally is partly due to the industry's optimistic expectations for demand, and the recent signs of weak demand from the downstream may have a negative impact on the market mentality.

Third, the economic data is still difficult to optimistic From the recent release of economic data, the domestic economy has shown signs of stabilization. China's manufacturing PMI rose by 0.6 to 49.8 in September, the first rise since May; HSBC's manufacturing PMI rebounded by 0.3 to 47.9 in September; the manufacturing contraction has slowed. From the perspective of sub-indicators, the inventory index fell month by ring, and the destocking of companies continued, while the demand, production, and purchasing indicators all rebounded. The effect of steady growth policies in the early stages began gradually. However, it remains to be seen whether the signs of stabilization in September will narrow the room for loosening in the later period. At the same time, the current PMI is still below the 50% alert line, and the overall manufacturing industry is still shrinking. In addition, from a historical point of view, the increase rate of PMI in September this year was only slightly better than the same period of 2009 and 2011, and was significantly lower than the average of 2% increase in PMI in September of the past seven years. The author believes that the strength of domestic economic recovery in September is weak and it is difficult to constitute effective support for the market.

In summary, with the gradual digestion of QE3, external benefits appear to be exhausted, while domestic PMI data is unsatisfactory, coupled with lower crude oil, chemical varieties as a whole pressure. There is no sign of significant improvement in the downstream demand for short-term methanol. With the gradual recovery of supply, prices in the mainland market face downward pressure. From the recent disk situation, the ME1301 has experienced significant contraction since the recent high level, and the pressure along the upper edge of 2130 yuan/ton is significant. It is expected that there will be a certain degree of adjustment in the future.