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Methanol overhaul in spring is about to start

In late March, the spot price of methanol in China fell sharply. The delivery price in Inner Mongolia has dropped to 1350-1400 yuan / ton, and that in East China has dropped to about 1650 yuan / ton. However, the large-scale spring inspection of domestic methanol production enterprises is about to start. According to statistics, there will be more than 5.1 million tons / year of methanol units to be overhauled in April, and more than 5.5 million tons / year of methanol units to be overhauled in May.

Methanol overhaul in spring is about to start

Severe situation of oversupply

After the control of domestic social public events, there are problems in the recovery rhythm of methanol industry chain: when the terminal fails to start, methanol enterprises return to work in large areas, resulting in a rapid backlog of methanol spot.

First, domestic methanol production enterprises return to work earlier than downstream. At present, most of the downstream methanol is still in recovery period, and the recovery time of traditional downstream methanol, such as formaldehyde and MTBE, has moved backward compared with the same period of previous years, which is still less than 70% of the same period of last year. First, the methanol inventory of domestic methanol production enterprises and most downstream markets exceeded the historical period, and the market quickly fell into the unsalable situation, while the decline of methanol price further accelerated the delivery speed of the downstream, so that the methanol inventory of the entire industrial chain was on the high side.

Second, since November last year, the methanol import has maintained a high profit, once above 200 yuan / ton. Methanol importers continue to import a large amount of methanol, which greatly increases the saleable inventory in coastal areas. Up to now, there are 350000 tons of tradable goods in the port area, 50% higher than the same period last year. The total methanol inventory in the port area is also on the high side. At present, it is about 1.05 million tons, which is basically the same as that in the same period of last year, but much higher than that in the same period of previous years.

Both the upstream and downstream methanol inventory are at a high level, and the downstream demand recovery is not as expected, which causes the current methanol spot price to continue to decline but the delivery is not smooth. Without extra storage capacity, even if the methanol price drops, it will not stimulate the downstream to receive more goods. The continuous poor sales will lead to large-scale shutdown of methanol production enterprises.

Large loss of production enterprises

At present, spot prices in many regions have fallen through the cost line of most enterprises, and methanol production enterprises have suffered serious losses. At the same time, due to the failure of effective release of methanol inventory, the start-up of methanol plant has been forced to decline. Last week, some methanol enterprises in inland areas with high inventory and poor sales began spring maintenance.

This week, 5 methanol production capacity totaling 2.8 million tons / year in Inner Mongolia and Shaanxi began to be overhauled. In April, it is estimated that 5.1 million tons / year methanol units will be added for maintenance in China, and in May, more than 5.5 million tons / year methanol units will be planned for maintenance.

If the above-mentioned units are overhauled as scheduled, the domestic methanol operation rate will be at a relatively low level of 65% for two consecutive months, and the supply will be greatly reduced, and the current high methanol inventory is also expected to be rapidly reduced. If downstream construction resumes to the same period last year, the short-term market will be in short supply.

At present, the operation rate of methanol to olefin unit is low. By the end of this month, two methanol to olefin units with a total capacity of 1.4 million tons / year will be back to work, and the methanol demand will increase by about 350000 tons in April. In the traditional downstream, the formaldehyde industry began to resume work one after another, the MTBE industry was stimulated by low oil prices, and the operating rate is also rising, and the rest of the downstream operating rate is expected to return to the same period last year in mid April.

To sum up, with the start of domestic methanol industry's spring shutdown and overhaul, the situation of methanol market oversupply is expected to end, and it can be completely solved from April to May. At the same time, through this round of reshuffle, some units in the domestic methanol market are relatively small and backward in technology or completely withdraw from the market.

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