Introduction: During the holiday period, road transport pickup was restricted, leading to passive accumulation of inventories at inland production enterprises. In the coastal market, domestic supply was sufficient, but export shipments supported cargo uptake, resulting in limited changes in port methanol inventories. However, after the holiday, buying sentiment for methanol in the coastal market was relatively weak, and prices fell. This also drove a slight decline in the inland market. However, due to the maintenance of multiple methanol units in inland regions, the magnitude of the decline was relatively limited.

1. Methanol Prices Decline, Regional Price Spread Narrows

In the coastal methanol market, sufficient domestic supply slowed the pace of port methanol inventory drawdowns, providing weak support to the market. Coupled with fluctuations in the international situation, the market mostly adopted a wait-and-see attitude. Buying interest was weak, and prices came under pressure, declining rapidly. In contrast, the inland methanol market saw prices supported by some cargoes flowing to coastal regions and the maintenance of several large methanol units. As a result, inland prices declined only modestly. The price spread between the coastal and inland markets narrowed, and arbitrage opportunities between some regions were temporarily closed.

2. Expected Decline in Domestic and Import Supply

Affected by international plant operations and logistics, total methanol imports in May are expected to remain low. Based on forecasts, weekly methanol import volumes are likely to stay below 100,000 tons for the coming weeks. On the supply side, a number of methanol plants are scheduled for planned or unplanned shutdowns in the near term. Therefore, domestic supply is also expected to decline over the next two weeks. Specific developments can be tracked by monitoring individual unit operations.

3. Expected Changes in Regional Supply-Demand Dynamics

Overall, although methanol inventories in the coastal market declined in April, the drop was not significant. This was partly due to a phased increase in import supply in April, and also because of substantial domestic supply supplementation. Recently, driven by weak buying sentiment in the coastal market, prices fell and the price difference with inland markets narrowed. Regional arbitrage temporarily closed. Additionally, with low import volumes expected in May providing strong support to the coastal market, holders of cargoes are more willing to hold inventories after the price decline. In the near term, the coastal methanol market may strengthen. Specific attention should be paid to the impact of changes in regional price spreads and cargo flow patterns on the regional supply-demand structure.