Trade flow changes the cost of production costs, the international methanol market is under pressure in the middle of the year

Recently, according to a number of market consulting agencies, in the second half of 2022, the global methanol market will show uncertainty. Due to the changes in trade flow and high production costs, the market participants are generally concerned about the demand for manufacturing and fuel downstream applications, and the factors that affect global fundamentals are still developing, which may have a direct and indirect impact on the commodity market.

Asian methanol demand recovery

Market participants predict that the fundamental aspects of the Asian methanol market will remain balanced, provided that the prevention and control measures for the new crown pneumonia epidemic are expected to relax. However, if more methanol production in the Middle East continues to flow to Southeast Asia and Northeast Asia, the optimism of the East Asian market may weaken. If the prices of ethylene and acrylic continued to rise, it is expected that the demand for methanol plant in the second half of the year will continue to stabilize the demand for methanol raw materials. According to the S & P global product insights, in April, the price difference between CFR China methanol and CFR Northeast Asian ethylene reached a two -year high, reaching $ 1006/ton. According to sources, compared with the prices of ethylene and acrylic in China and Northeast Asia, China's methanol prices have risen slowly.

In Southeast Asia, the main ports of the main ports will cause certain supply pressure due to the increase in the supply of methanol in the Middle East. The demand for these ports is limited, and it is usually implemented in accordance with the contract. However, spot demand from major ports from Indonesia and Vietnam may support the prices of methanol in Southeast Asia. Sources said that the difference between the price between China and Southeast Asia is expected to remain at about $ 70 ~ 80/ton.

India's methanol prices are still mixed. This price is supported by the seasonal demand for the formaldehyde industry after September and the cost of continuous raw materials. In addition, in the second half of 2022, due to the continuous influence of Russia's exports of Russia and Ukraine, it may cause trade flow. The downstream demand of the Indian acetic acid industry will remain stable. Due to the improvement of profit margins and strong demand, the only producer in India, Gujiratenalda Mermmer, and Chemicals Co., Ltd. will maintain a stable operating load. With the continued growth of the Indian economy from the impact of the epidemic, the construction and pharmaceutical industries will support India's methanol consumption steadily.

European methanol still has uncertainty

In the second half of 2022, the European and American methanol markets were still uncertain, depending on the impact of global factors on its supply and demand. American market sources predict that its overall domestic demand will remain weak, because the use of windshield wiper after winter becomes less, and in warm months, demand will often decrease. Sources also predict that due to excess global supply, methanol prices may fall further in the second half of this year.

U.S. methanol output is expected to remain high because there is no stoppage maintenance plan for the rest of this year. A source said that global maintenance will not affect the US supply. Given the high freight rate of astronomical figures, the profit margin of arbitrage will still stay in the area.

In Europe, with the decoupling of European relations with Russia, and the demand for natural gas in the United States has continued to increase, natural gas supply and price issues are the urgent issues of the local methanol market. Europe may have more imported methanol from the opposite side of the Atlantic to ensure that its supply is healthy. After the Russian -Ukraine conflict was upgraded, European market participants stopped Russian methanol's spot transactions. OCI in the Netherlands has maintained methanol to discontinue production since the summer of 2021. Some European methanol supply is not smooth. The methanol device of Serbia MSK has been parking since the fall of 2021, and British oil in Germany has faced serious production restrictions since 2021. It is expected that it will not improve by the end of 2022. A manufacturer said that with the continuous increase in freight, the continuous dependence of European methanol supply to imported goods in the United States has narrowed the profit margin of the manufacturer and made the region's methanol supply more vulnerable.

Although the European market supply issues in the first half of this year occupy the dominant position, the problem of European methanol needs also need to pay attention. At present, European methanol demand is stable. This situation is expected to change in the third quarter, and more changes may occur in the fourth quarter. According to sources, the support of the demand for alhanol is mainly from the chemical industry, such as the consumption of formaldehyde, acetic acid, and tannolin, but due to the slowdown in economic growth means that the demand has slowed down, family decoration and travel expenditure are expected to be significantly reduced. It may be possible. Demand problems.

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