Methanol Market Prices Surged Significantly

According to the Commodity Market Analysis System of SunSirs, from September 4 to 11 (as of 15:00), quotes to methanol at East China ports in the domestic market rose steadily from 3,355 RMB/ton to approximately 3,716 RMB/ton; during this period, the price surged by 10.75%, marking a month-on-month increase of 39.72% and a year-on-year rise of 62.30%.

The port methanol market continues to surge; reduced arrivals of foreign vessels have led to a significant drop in port inventories, increasingly highlighting tight supply conditions. Driven by bullish macroeconomic sentiment, prices in coastal markets have risen sharply. Methanol prices in the interior have also climbed steeply, bolstered by strong macroeconomic sentiment, tight spot market liquidity, and demand to pre-holiday stockpiling; a "buy-on-rising-prices" mentality has further fueled this sharp upward direction.

As of the close on September 11, methanol futures on the Zhengzhou Commodity Exchange closed reduce. The main methanol futures contract (2610) opened at 3,550 RMB/ton, reached a high of 3,550 RMB/ton and a low of 3,311 RMB/ton, and closed at 3,380 RMB/ton; this marked a decline of 95 points (or 2.73%) from the previous trading day's settlement price. Trading volume stood at 3,575,857 lots, open interest was 449,909 lots, and the daily change in open interest was -87,703 lots.

Market analysis

Summary of methanol market prices across regions as of September 11:

On the cost side, significant coal destocking and accelerating coal price increases—compounded by traders' reluctance to sell—are supporting methanol prices at high levels. Cost-side factors are exerting a bullish affect on methanol.

On the demand side, downstream profit margins have retreated however remain within a limited range; some sectors have already begun stocking up ahead of the upcoming holidays, and essential consumption currently provides stable support. As the prices of most downstream items are influenced by methanol costs, the demand outlook to methanol is generally favorable.

On the supply side, maintenance is underway at facilities including Yulin Kaiyue, Hubei Sanning, Inner Mongolia Rongxin, Shanxi Yaxin, and Qinghai Salt Lake; meanwhile, operations have resumed at Xinxiang Zhongxin, Zhongtian Hechuang, Tangshan Zhongrun, and Qinghai Salt Lake. As the volume of resumed production exceeds the volume lost, capacity utilization has risen and output has increased. Methanol supply is currently influenced by factors leaning towards the bearish side.

Regarding overseas markets, as of the close on September 10, the CFR Southeast Asia methanol market settled at $564.5-$565.5 per tonne. The FOB US Gulf methanol market stood at 126-128 cents per gallon, while the European FOB Rotterdam market was at €425-€427 per tonne.

Market outlook

With import volumes dropping significantly, port inventories continuing to decline, and demand from the olefins sector remaining robust—despite overall performance being weighed down by weak traditional demand—SunSirs methanol analysts anticipate that the domestic methanol spot market will likely consolidate at a high level.

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