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Insight | Time:Nov 29 2016 4:19PM
Methanol imports likely to increase in 2017 after giant drop in Oct
 
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China's methanol imports totaled 587.8kt in October, recording a whopping 30.17% drop, compared with 841.7kt in September, 2016. Monthly imports have been sustaining relatively high since this May, but then, how does it come that the imports have decreased so fast in October?

Heavy turnaround of overseas plants, less production for China in Oct


There were several plants under turnaround in Oct, leading to less production being shipped to China’s market. Compared with the imports in Sep, China received less supply from Iran, New Zealand, Oman and Malaysia, who are the largest origins of China’s methanol imports.

Some ships delayed by bad weather
Cargo shipping was affected by a series of typhoons in the latter half of Oct. Some ships scheduled in Oct did not arrive until early Nov, which was another reason accounting for the decrease in methanol imports.

Fewer imports accelerating the reduction of storetank inventory
As of the end of Oct, total storetank inventory in East and South China fell continuously to 799kt from 1,003kt in the end of Sep. A reduction of 204kt reflected the drop of 254kt in imports over the same period.

Outlook of methanol imports in 2017


China's methanol imports amount to 7,363.2kt over Jan-Oct, 2016, up 2,821.3kt or 62.12% on annual basis. Will the imports increase in 2017? We're positive.

Upcoming methanol-to-olefins plants in East China
Company MTO capacity (kt/yr) Methanol requirement (kt/yr) Captive methanol (kt/yr) Startup
Sailboat Petrochemcial (Jiangsu Shenghong) 830 2500 0 Q1, 2017
Fund Energy (Fund Changzhou) 330 1000 0 Q1, 2017

The main driving force incentivizing boom of imports is the expectation of startup of two upcoming MTO plants –Sailboat Petrochemical (Jiangsu Shenghong) and Fund Energy (Changzhou). Both of the two plants relay on merchant methanol supply, with a requirement for 3,500kt per year of feedstock. It is estimated roughly that 60% or 2,100kt of the requirement needs to be covered by imported methanol, which can be translated into an addition of 175kt of imports per month. It is expected that methanol imports may reach new high of 1,000kt per month in the year of 2017.
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