【Introduction】: Recently, imported methanol volumes in coastal markets have remained at low levels, while domestic supply has increased to fill the gap. Major olefin plants along the Yangtze River have all shut down, keeping apparent import demand low. Overall, the coastal methanol market is characterized by weak supply and weak demand.
I. Supply Side
This week, domestic methanol supply via road and water transport increased slightly. However, import volumes remain at a low level, resulting in overall supply staying relatively tight and significantly lower than the same period last year.
Looking ahead, domestic methanol production is expected to recover and rise. In addition to meeting rigid downstream demand in inland regions, some surplus is expected to be redirected to coastal markets. Meanwhile, there are currently no expectations for an increase in imports, which are likely to continue operating at low levels. Overall, supplementary inland supply may ease the tightness in coastal markets, but the volume of this supplement could be limited. The speed of replenishment will also be constrained by factors such as transportation capacity and low inventory levels at inland plants.
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II. Inventory
Currently, all olefin plants in the East China coastal market have shut down, causing continued weakness in apparent import demand. Although supply remains low, port methanol inventories declined only marginally this week.
In the short term, sluggish apparent import demand is expected to persist. With phased month-on-month increases in import volumes and supplementary supply from inland sources, port methanol inventories are projected to rise slightly. However, the rate of increase may be slow, and port inventories are expected to remain at low levels throughout November. Attention should also be paid to the impact of typhoon weather on unloading speeds.
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III. Summary
Overall, tradable quantities in the port methanol market continue to remain low. Holders show little willingness to sell at low prices, yet coastal apparent demand is weak, and downstream users resist high prices, leading to a stalemate in the market with prices oscillating within a range. Looking forward, tradable quantities in the port market may increase due to supplementary supply from inland sources, but the growth rate will be gradual, offering limited relief to the current tight supply situation. Coastal methanol prices are expected to continue fluctuating at high levels. Market sentiment will be influenced by international logistics and macroeconomic conditions.
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