Introduction: Methanol market prices have continued to decline recently. With the confirmed shutdown of coastal olefin plants and the anticipated recovery in both imported and domestic supply in November, a trend of inventory accumulation is now largely established. Although current spot offers in coastal regions remain relatively firm, traditional downstream sectors are likely entering their seasonal off-peak period. Apart from essential demand, end-users show little willingness to accept high prices. In inland production areas, auction results fluctuate due to periodic restocking needs; while contract cycles there are shorter than in coastal regions, intermediaries generally exhibit a strong bearish sentiment.
As of now, all coastal methanol-to-olefins (MTO) plants have ceased operations, a historically rare occurrence. Previously, we noted that increased non-Iranian supply in November would boost total imports. As of this writing, we estimate incoming shipments of non-Iranian cargoes next month at approximately 350,000 tons. Customs data for recent months has remained elevated, primarily driven by a significant surge in Russian overland deliveries. Consequently, the certainty of total import volumes for November still hinges on final shipping schedules from key Middle Eastern regions.
Currently, inventory levels at Chinese coastal ports are low. While some cargo previously entered bonded tank farms, recent export transactions have been sluggish, meaning some bonded stock may be cleared through customs into the domestic market. Although European prices have rebounded slightly in the last ten days due to buying interest from certain suppliers, weak pricing earlier led to bulk shipments from the Americas being diverted to other Asian regions. Coupled with high inventory levels in India, we expect total export volumes to continue declining throughout November and December.
With the complete shutdown of coastal olefin plants, apparent import demand in the coastal market will drop to new lows. Recently, we have tracked an increasing flow of domestic cargoes arriving at port terminals. As a result, the turning point for port inventories has arrived earlier than expected. Following fluctuations at low levels in the latter half of the month, phased inventory accumulation is set to begin. However, the specific regions experiencing accumulation require ongoing monitoring, as some large-scale terminal plants with traditional downstream units remain operational, potentially creating restocking demand despite currently low inventory levels.
In summary, Chempricehub projects that the supply-demand imbalance in November may prove irreversible. We will continue to monitor changes in olefin margins, specifically regarding startup variations among individual Shandong olefin plants and the commissioning status of Baofeng’s methanol units. On the macro front, attention remains focused on the impact of persistently high crude oil prices on US-Iran geopolitical tensions.
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