Methanol prices will fall back in June

In mid-May, the dollar index unexpectedly weakened, crude oil and downstream products can be obtained because of the breathing machine, have started rally. Commodity futures rose before the holiday, the main 1709 contract from 2200 yuan / ton line jumped to 2400 yuan / ton in the vicinity. But the methanol rebound in the road facing more obstacles, is expected in June may return to the decline in methanol.

Crude oil lacks further strength

The OPEC meeting, which was highly concerned by the market, ended at the end of May, although the oil producers agreed to extend the agreement to cut crude oil production to the first quarter of 2018, but still remain unchanged at the original level, Disappointed, the international oil prices and therefore lost further momentum, which New York crude oil rose to 52 US dollars / barrel near the turn down. I believe that the OPEC oil production organization is not in the cut range to further improve, but only rely on to extend production time is difficult to play a role in re-balancing the crude oil market, because the existing production agreement continues to maintain the current level of 9 months, The results will only make US crude oil production continues to rise, and OPEC oil producers to balance the supply and demand of crude oil market and the efforts to fall short, oil prices can not rise again.

Domestic methanol supply pressure diminished

Thanks to the early maintenance of the methanol plant has been restarted and part of the gas device restart, since May, the domestic methanol business rate continues to show upward trend, the level of the whole month to maintain 57% -63%. Although the central environmental inspection action has made the coal chemical industry in Shanxi area downtime, while the Northwest Evergreen, Shenmu and Gui Lu and other devices have also been affected, but the impact of a shorter time. Overall, the release of methanol production capacity is still advancing, supply pressure tends to increase. According to Jinlian a statistical data show that as of the end of May, China’s methanol enterprises started at 63%, an increase of 4 percentage points from the beginning of the month. Which northwest and Shandong methanol operating rate rose more significant, the monthly increase of 11% and 7% respectively.

Into June, Shandong Province, the new methanol project is expected to be strong, of which the new Phoenix to build an annual output of 200,000 tons of methanol plant is expected to be put into operation in June, while Shandong Mingshui and Hualu Hengsheng new annual production of 60 10,000 tons and 1 million tons project will also be expected to put into operation at the end of June. In the long term, Shandong Ruxi new annual output of 800,000 tons project and Rising annual output of 500,000 tons project is expected to be put into operation in September – October, in other words with the new methanol project put into operation, supply increment will be further expanded. In addition, the international methanol market late imports will show a growth trend, mainly due to the current recovery of natural gas supply in South America, part of the device operating rate increased to full load.

Downstream demand into the off-season season

Usually in June each year, domestic methanol downstream products formaldehyde, acetic acid and dimethyl ether will enter the traditional off-season model, the operating rate will be varying degrees of decline, mainly due to the arrival of the southern rainy season led to decline in plate production, thereby reducing the demand for formaldehyde , While dimethyl ether and acetic acid, the enterprise will take the off-season to carry out maintenance work, lower operating rate weakened for the demand for methanol. It is understood that the week before the holiday domestic methanol downstream product prices showed a downward trend, the weekly decline around 0.62% -1.93%. Terminal demand caused by weak purchasing power is not strong, methanol downstream manufacturers choose more parking maintenance device.

Overall, the international crude oil failed to further strengthen the difficult to give downstream goods can continue to do more emboldened, while the methanol supply and demand pattern is weak, the new device continues to run in June, external imports tend to grow, while the downstream demand is turned Into the off season. Is expected to fall in June or return to methanol