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Analysis of the impact of social public events on methanol market
2020-03-28

The novel coronavirus has spread all over the world, and many countries with new cases include South Korea, Italy, Iran, Japan and Germany. This paper analyzes the methanol supply and demand in these countries and its impact on China's methanol supply and demand, as well as the impact of social public events on methanol price through the transmission path of crude oil.


Methanol supply and demand pressure still exists under the influence of social public events


Analysis of the impact of social public events on methanol market


Social public events have spread on a large scale all over the world. At present, except for the countries with a large number of foreign infections, such as South Korea, Italy, Iran, Japan and Germany, South Korea, Japan and Italy have no methanol production capacity. The annual methanol import volume of South Korea and Japan is 1.8-2 million tons. The methanol production capacity and demand in Europe are relatively small. The methanol production capacity in Germany is 1.85 million tons, and the methanol production capacity in Germany is 1.85 million tons Alcohol production capacity is small, which has little impact on global supply and demand. Iran's methanol production capacity is 8.9 million tons, which is the third largest methanol producer in the world. Iran's annual methanol production is about 6.2 million tons, of which more than 50% is exported to China, and the rest is exported to countries in Europe, the Middle East and Southeast Asia. Iran's methanol has a certain impact on global methanol supply and demand. In 2019, the global methanol production capacity totaled 133.29 million tons, of which China's methanol production capacity reached 87.41 million tons, accounting for 65%, making it the world's largest methanol producer. In 2019, China's methanol imports totaled 10.8957 million tons, an increase of 46.67% year on year.


In 2019, China's methanol import increased, and some changes have taken place in major import regions. In 2018, China's top five methanol importers are Iran, New Zealand, Saudi Arabia, Trinidad and Malaysia. In 2019, the top five methanol importers are Iran, New Zealand, Trinidad, Saudi Arabia and Malaysia. The country has not changed, but the import volume from Trinidad has increased significantly. From the perspective of major importing countries, the import from Iran accounts for 37% of China's total import volume, 200000-400000 tons per month, and the import from Iran accounts for about 7% of China's total methanol demand. Although this volume is small, the import volume is mainly concentrated in the port, while the import volume accounts for a large proportion of port methanol demand. There are 3 million tons of purchased methanol to olefin units in Chinese ports, 9 million tons of methanol are needed, 8.4 million tons are needed, and 700000 tons are needed in a single month, some of which are domestic long-term contracts and some are foreign long-term contracts. According to this calculation, the monthly import volume from Iran accounts for one-half to one-third of the port methanol to olefin demand.


If the social public events in Iran continue to develop, the methanol plant in Iran stops or exports decrease, then the methanol inventory in China's port is expected to continue to go to the storage, and the supply and demand of methanol in the port will become tight. Therefore, the operation status and export situation of Iran's methanol plant have a great impact on China's methanol. At present, the development of social public events in Iran is relatively fast and serious. The infected personnel have high positions and high death rate. If the social public events continue to ferment in the future, the rate will probably affect the methanol export of Iran.


How does Iran's methanol export affect the market? We can refer to its January data to analyze. In the early January, Iran's Limited gas caused most of its methanol plants to be reduced or overhauled. From China's market, the price of methanol ports rose from January 1st to January 20th, and spot prices rose from 2200 yuan / ton to 2400 yuan / ton, and futures closing prices jumped from 2200/ tons to 2400/ tons, then adjusted to 2300/ tons before reaching the peak in the spot market. China's import of methanol from Iran began to decrease in February. According to the statistics of shipping schedule, the amount of methanol arriving at the port in January was 950000 tons, and the amount of methanol arriving at the port in February was about 600000 tons. Since the methanol plants in Iran and Malaysia were restarted in succession after the middle and late February, it is estimated that the amount of methanol arriving at the port in March will not recover rapidly. However, the social public events that have occurred in Iran at the end of February and the beginning of March, if the logistics and personnel isolation are limited, Then Iran's methanol production will be reduced to a certain extent, and China's import will maintain a low level.


Methanol price waiting direction in oil price fluctuation


Since the large-scale outbreak of social public events in China at the end of January, strict isolation measures have been taken all over the country, which has greatly affected the production, sales and logistics of enterprises. In February, PMI fell to 35.7, and the average daily coal consumption of six major power generation groups decreased by 26.5% compared with the same period last year. The methanol market is no exception. The supply and demand of methanol are weak, the price is declining, and the inventory is increasing. The operating rate of methanol production enterprises was 72% in January, and the lowest one was 61% in February. The supply of methanol was reduced by about 600000 tons. The operating rate of methanol downstream decreased significantly, and the operating rate of most products was at the lowest level for many years. The port inventory once again rose to a high level. Many enterprises expanded the storage and reduced the load. However, with the resumption of work in some areas since late February, the inventory of methanol production enterprises decreased and the operation rate gradually recovered. From the current situation abroad, there is no effective control measures, and it is expected that the actual impact time will be longer than the domestic time.


Another influence path of global public events on methanol is the impact on crude oil, which is then transmitted to the price of energy products and downstream chemicals, thus affecting the price of methanol. Since the outbreak of social public events, the price of natural gas has fallen by 10%. Methanol outside China uses natural gas as raw material, and the cost of methanol has declined significantly. From the perspective of China's market, up to now, the decline of coal price is not obvious, and the methanol cost is not obvious. Due to the development of coal to olefin, the interaction between petrochemical industry and coal chemical industry has been very large. The demand for methanol to olefin accounts for half of the demand for methanol, and methanol to olefin is purchased