familyfeudchannel| Chang 'an Futures Zhang Chen: Low inventory and negative feedback game methanol dilemma

The methanol disk continued to fluctuate last week.FamilyfeudchannelThe weekly line of the main contract is close to a cross star. The spot price trend is relatively stable, although there is a demand for replenishment of raw materials after the festival, but the downstream has a strong resistance to the high-priced supply, the procurement is relatively cautious, and the market buys less gas. As of May 10, the median price of methanol in East China market was 2722.Familyfeudchannel.5 yuan / ton, up 27.50 yuan / ton from before the festival, low inventory in the port continued to support spot prices, and the base spread widened again. The median price in the South China market was 2615 yuan / ton, down 22.50 yuan / ton from the previous month, and 2345 yuan / ton in the northwest market. It rose 5 yuan / ton from the previous month, and the median price in southern Shandong market was 2530 yuan / ton, down 150 yuan / ton from the previous month.

First, supply: capacity utilization rate remains high, pay attention to spring inspection

In the week of May 10, the capacity utilization rate of domestic methanol plants was 81.45%, down 1.29% from the previous week, 10.54% higher than the same period last year. Domestic weekly methanol output was 1.7064 million tons, an increase of 178100 tons over the same period last year, an increase of 11.65%. It decreased by 27020 tons, or 1.56%, compared with the previous week.

During the last statistical period, nearly ten sets of devices were stopped, including Chongqing Cabelle, Xinxiang Zhongxin, Inner Mongolia Rongxin and so on, among which there were many large devices, but there were relatively few recovery devices, so the supply side shrank slightly to support the market mentality. From the point of view of the operation of the device, the capacity loss of the parking device this week will be realized, so the supply may still be reduced, but the capacity utilization rate of the current device is high in the same period, and the profitability of coal-made devices is still good. Therefore, the overall plant start-up situation in the future is expected to move down significantly, and the actual support of the domestic supply side should not be overly optimistic.

Last week, the capacity utilization rate of overseas installations dropped sharply for three consecutive weeks, and is now at a low level in the same period. Iran's ZPC2# restarted but production reflected this week. The start of FPC is low at 5-60% of the load, Arian (BCCO) is not high, Nat parking in the United States, South American region to maintain a state of load reduction, Malaysia oil plant, Brunei BMC parking, a number of non-Iraqi devices negative reduction and parking, the port later arrival volume is still uncertain.

After the festival, the international methanol price went up and down, mainly as the FOB price of the exporting country fell, while the CIF price of the importing country rose, which may be due to the rise in transport prices. after the holiday, the main port price of CFR in China rose again to US $302.5 / ton, which translates to about 2705 yuan / ton, so the import profit is still relatively poor.

Last week, the spot market atmosphere was general, although there was a certain rigid demand for replenishment in the lower reaches of the festival, but the procurement was relatively cautious, and the downstream was more resistant to the high-priced supply. In terms of units, the operating rate of most of the upstream and downstream varieties of units decreased. In the week of May 10, the operating rate of methanol-to-olefin units was 86.40%, down 2.01% from the previous week. Qinghai Salt Lake olefin plant was shut down last Thursday, and methanol plant was normal. Datang Duolun and Yanchang medium coal methanol plant stopped synchronously with the olefin plant, the impact is relatively small, according to Longzhong information previous research. In May, MTO enterprises in East China, Shandong and other regions have maintenance plans, and Shandong Hengtong planned maintenance time has been advanced to this week, in addition, unplanned equipment changes do not rule out, so it is expected that the operating rate will be reduced.

In the week of May 10th, the average operating rate of downstream PP was 51.56%, 0.6% lower than the previous week, and the average operating rate of downstream PE was 43.73%, 1.14% lower than that before the festival. The demand of PP terminal industry was OK, and PE mainly showed a decrease in demand for agricultural film, in which the demand for greenhouse film was off-season, the order follow-up was limited, the demand for pipe and cable and other building materials was mediocre, the demand weakened, and the operating rate was low in the same period. Overall, there is no bright performance of terminal demand, and the demand support is limited.

The operating rate of traditional downstream devices mostly declined. according to Longzhong information, in the week of May 10, due to the negative reduction of Shandong Lianyi plant and the parking of Liuyang Jinggang, the operating rate of formaldehyde was 53.81%, down 4.53% from the previous week; during the short shutdown and restart of acetic acid Shunda, other devices maintained the previous load, so the capacity utilization rate increased slightly by 0.37% to 93.36%, rising month-on-month. Although the dimethyl ether Yima Kaixiang device starts with a low load, the Xinxiang heart-to-heart device stops, and the operating rate is also slightly lower, about 8.99%.

Recently, the price of methanol continues to rise, the downstream follow-up is insufficient, the profitability of the current downstream unit is relatively poor, and the negative reduction or parking action of the follow-up unit can not be ruled out. During the last statistical period, the gross profit of the methanol-to-olefin plant in East China was-1716 yuan / ton. at present, the loss range of the methanol-to-olefin plant is much higher than that of other production plants, and the operation rate of external propylene extraction or PDH process can not be ruled out. The gross profit of formaldehyde plant is-30 yuan / ton, the loss is narrowed, the dimethyl ether plant is slightly profitable, and the acetic acid plant is profitable.

Inventory: Port inventory is still low

In the week of May 10th, the social inventory of methanol was 1.0323 million tons, an increase of 57200 tons over the previous month. Both ports and production enterprises were burdened with storage, but the overall social inventory was still low in the same period.

In the week of May 10th, methanol port inventory was 642300 tons, up 15000 tons from the previous month, down 128000 tons from the same period last year. The current port inventory is still low in the same period. Methanol port arrival volume during the statistical period is 390800 tons, of which 291500 tons are dominant, which is higher than the previous estimate. Longzhong sample port inventory rose by 15000 tons, rigid demand in East China is stable, and port inventory is still low at present. It is expected that there will be a significant decline in port arrival volume this period, and low port inventory will continue to support prices in the region.

The inventory of methanol production enterprises in the plant was 390000 tons, an increase of 42200 tons over the previous month, or 12.46%. This is mainly due to the limitation of automobile transportation during the holiday period, which led to the slow delivery of goods by enterprises. With the recovery of automobile transportation and the overhaul of some large-scale equipment, it is expected that the inventory in the production enterprises will decline in this period.

In the week of May 10, the inventory of methanol downstream manufacturers was 159400 tons, a month-on-month drop of 20800 tons, and consumption inventory was dominant in the lower reaches of the holiday, but the current inventory is still at a medium-high level in the same period in history, and the willingness to replenish the inventory downstream is not urgent.

At present, the three methanol production methods are profitable, and the profits of coal-making plants have shrunk due to the rise in coal prices.

After the holiday, the price of thermal coal was relatively strong. The price of 5500 kcal thermal coal produced in Qinhuangdao Port rose 25 yuan / ton, returning to more than 850 yuan / ton, and the rise slowed on Friday. Last week, there was a small accumulation of warehouses in the nine ports around the Bohai Sea, due to the upside-down shipping profits, the general enthusiasm of traders in shipping, and a strong willingness to raise prices, downstream inquiries have increased, but the market transaction is not much. In terms of origin, some of the suspended coal mines resumed production and the supply resumed, but the safety supervision in the production areas was still strict. according to the latest market information, the environmental protection inspectors of Shaanxi Province were stationed in Yulin on May 10, and the inspection team conducted a large-scale inspection of various areas of the coal-producing city. the coal supply continues to be tight. The steel federation surveyed that the capacity utilization rate of 462 mines across the country was 91.7%, up 0.7% from the previous month. The purchase price of Shenhua's latest phase continued to rise on Friday. Kengkou market sentiment is relatively hot, Kengkou coal prices rise frequently, downstream coal yard, chemical plant procurement is more active. On the demand side, the Central Meteorological Observatory predicted on the 12th that "the strong precipitation in the south is gradually converging and the temperature in Huanghuai and other places in North China is gradually rising." the precipitation in the south is good for hydropower, the daily consumption of thermal power plants is general, and the number of days available in the overall inventory of power plants is relatively safe. coupled with the long-term cooperation to guarantee supply, the willingness to replenish the storage of the power plant is not strong, but the national temperature will gradually rise, and there is no need to be too bearish in the future. Non-electricity demand is relatively stable, chemical start-up to maintain a high level, cement clinker capacity utilization continues to increase, but still lags behind the same period in previous years. On the other hand, the China Railway Corporation announced that from April 1 to June 30, 2024, the national railway line will reduce the freight price of coal by 10% to 20%, and some sections by up to 30%. The price of coal transportation has dropped. The Russian government announced that the export duties on thermal coal and anthracite would be abolished from May 1 to August 31 this year, which would have a negative impact on coal prices. However, the future is about to enter the peak consumption season, the lower support of coal prices is also gradually strengthening, so it is not recommended to be bearish on coal prices, methanol cost support still exists.

Conclusion

After the festival, with the increase of overhaul of large-scale units in northwest China, the local supply of methanol will shrink again, but from the point of view of the current plant capacity utilization, the overall supply is still relatively sufficient, the demand is weak, and the operating rate of olefins units in East China may continue to decline. And due to profit reasons, the downstream negative feedback logic is strengthening, the cost-end coal price is rebounding, and in terms of inventory, the inventory of ports and manufacturers is still at a low level. And there is the possibility of going to the warehouse again, giving support under the disk, on the whole, the profit comes from the low inventory and the strong cost, the bad comes from the potential negative feedback of the downstream demand, and the multi-short factors are intertwined, and methanol is expected to remain volatile. For reference only.

Chang'an Futures: Zhang Chen

May 13, 2024

Zhang Chen, a researcher of coal chemical industry in Changan Futures, has systematic theoretical learning experience in coal and related industries. Since entering the futures market, he has been mainly responsible for the research of related varieties of thermal coal and coal chemical industry. He is good at analyzing market trends from policy guidance and fundamentals, and has rich professional knowledge and strong logical analysis ability.

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