Member ID:
Stay logged in for 30 days
Forget Your Password?

login CCFGroup App

Insight | Time:Aug 10 2017 10:59AM
Methanol supply-demand situation under environmental protection
Text size
A fourth round of inspections covering eight provincial-level areas begins. Areas including Shandong, Qinghai, Xinjiang, Hainan, Sichuan, Jilin, Zhejiang and Tibet are under inspections. Zhejiang Province is a large destination of methanol imports. Some methanol capacity is in operation in Qinghai, Xinjiang, Hainan, Sichuan and Jilin. And Shandong Province is a major methanol producing as well as consuming region in the north. There’s methanol capacity totaling about 6.6 million tons per year in Shandong, and many downstream plants congregate in this Province as well.

As of now, only Qinghai Zhonghao among major domestic methanol producers is reported to have its 600kt/yr methanol plant closed on Jul 31 for 1 month. Large methanol producers in Shandong don’t have plant maintenance plan.

On the demand side, traditional downstream derivatives accounts for most of methanol consumption in Shandong. At present, margins of formaldehyde, DME, MTBE are poor, especially for DME, whose production generates losses. According to CCFGroup’s data, the average operating rate of DME plants has been hovering as low as 15-18% in July. Several plants remain closed due to the losses. The average run rate of formaldehyde plants is at around 27-31%, with some plants required to restructure. As for MTBE, the average operating rate has dropped recently, regulated by environmental inspection in Shandong.

China’s methanol market follows the uptrend of commodity futures since H2 June. Methanol supply does not grow so fast as expected even in the low demand season in traditional downstream industries. In August, however, supply is expected to increase. Qinghai Zhonghao closed its methanol plant in end-July, which will be balanced by the restart of ENN Daland Banner’s plant in Inner Mongolia and Xianyang Chemical’s plant in Shaanxi. Mingshui Dahua’s 600kt/yr new unit and 350kt/yr old unit in Shandong are both likely to run normally from August. Adding to that is the expectation of the startup of Luxi Chemical’s fresh capacity in Aug-Sep.

However, demand in traditional downstream industries remain sluggish. Methanol-to-olefins plants are mostly running normally in coastal regions, except for Fund Energy’s MTO plant in Changzhou which remains shut since Mar 31. Even if Fund Energy restarts the plant, it cannot absorb the increase in domestic methanol production.
Related Articles
Methanol market daily (Jul 18, 2018)
ZCE methanol futures for Sep delivery close 0.38% higher
Methanol market keeps range bound
ZCE methanol futures for Sep delivery open 1 higher
Methanol market daily (Jul 17, 2018)
ZCE methanol futures for Sep delivery close 0.42% lower
Methanol market keeps range bound
ZCE methanol futures for Sep delivery open 7 lower
Methanol market daily (Jul 16, 2018)
ZCE methanol futures for Sep delivery close 1.28% lower
Brief analysis of annual reports of some listed companies ...
Nylon and polyester markets in reverse trend

浙公网安备 33010902000742号