Introduction: The recent core driver of the methanol market has remained geopolitical factors. On Friday, Iran's Revolutionary Guard announced the closure of the Strait of Hormuz, triggering another strong surge in international oil prices. Consequently, methanol futures hit a new high during Friday's night session, reaching an intraday peak of 3,418 yuan/ton before settling at 3,381 yuan/ton.

Below, we briefly analyze the recent market trends from three perspectives:

1. Downstream Industry Profitability: The rapid surge in methanol prices over the past two days has eroded olefin profits. However, compared on a three-week sequential basis, profitability remains relatively healthy. This week, a major terminal plant resumed operations, likely aiming to consume low-cost raw material inventory. The sustainability of its operation will depend on the sales and profitability of its end products. Currently, midstream and downstream players exhibit significant price anxiety, fearing a swift price correction once the conflict subsides. Consequently, trading strategies are cautious, characterized by small, careful long positions or procurement based on immediate needs.

2. Re-export Dynamics: CFR Southeast Asia prices have reached a high of $670-680/ton this week. The substantial regional price differentials, coupled with international suppliers' need to fulfill contracts in other regions directly impacted by the strait blockade, have fueled continuous negotiations and increasing deal volumes for exports and re-exports from some Chinese coastal terminals. Volumes, previously tracked around 100,000 tons, may have increased to approximately 200,000 tons, with some cargoes negotiated for May shipment. This situation will offset the potential weakening of import demand at ports due to increased domestic flows to the coast, thereby continuing to support coastal inventory drawdowns.

As of the latest shipping schedule data before publication, some foreign vessel arrivals in late March appear slightly delayed, with the final discharge volume potentially adjusted to 419,500 tons. Arrivals in April are expected to rebound, primarily influenced by some delayed March cargoes being discharged in April and increased arrivals of non-Iranian cargoes from certain regions, with estimated arrivals around 600,000 tons.

3. Import Profitability: Due to high non-Iranian transaction prices referenced in USD-denominated quotes, the average price has been significantly pulled up. This has led to a substantial inversion in import costs when calculated using previous methods against next-month paper contracts. Therefore, aside from a few risk-taking vessels or cargo owners who passed through the strait earlier, most participants are adopting a cautious wait-and-see approach. Expectations and logical support from this price inversion, re-export activities, and potential inland deliveries have contributed to a significant strengthening of the Taicang paper contract basis this week.

In summary, while geopolitical drivers currently still involve speculative sentiment, it cannot be ruled out that some impact has already translated into fundamental support. Downstream acceptance of high prices requires time. High volatility is expected to remain常态, and absolute price levels are暂时 difficult to assess. Methanol is likely to maintain a strong,震荡 pattern. Key focal points remain the strait's通行 status and the acceptance capacity of overseas downstream consumers.