Methanol Futures: Demand Pulling is the Key It is understood that at the end of November 2012, methanol continued to be pessimistic due to fundamentals, and its main force rebounded around 2750 yuan/ton. In the long run, the commissioning of some related devices by the end of the year may bring stimulus to the weak demand for methanol. After the methanol market, demand pull is the focus.

The probability of the recent 1301 contract price entering the bottom turbulence is more likely to be expected. The price is expected to run in the range of RMB 2,700-2,750/t; however, from the long-term perspective, Ningbo Qianyuan’s methanol-to-olefin (MTO) plant or production will provide low-grade methanol. The demand stimulated, the price of the main price of ** will rebound again. The target price of the 1305 contract price of the afternoon market is 2850 yuan/ton. It is recommended that investors should allocate more than one in a batch of 1305 contracts of 2,700 yuan/ton.

Due to the resumption of production of pre-equipment, the operating rate of the methanol plant rose sharply and remained high in the near future. As of November 23, the operating rate of methanol plant in the northwest region was 71.3%, and the overall national level was 69.8%. In addition, due to the continuing effects of the rain and snow in the north, the export of methanol from the northwest was blocked, allowing manufacturers to digest more inventories, causing the spot price of methanol in the Northwest to continue to decline. Last week, the market prices in Inner Mongolia, Shaanxi, Ningxia and Qinghai dropped by RMB 30/ton, RMB 30/ton, RMB 50/ton and RMB 40/ton, respectively, which also brought certain impact on the methanol market in East China. Therefore, the pressure on methanol supply in the afternoon will be Continue to increase, so as to continue to suppress the price.

Since August, with the relaxation of restrictions on Iranian chemical exports, the overall import of methanol in China has steadily increased. The import volume in October was 473,000 tons, of which Iran's import volume was 158,000 tons, although the cumulative year-on-year growth was still negative, but the import volume was still in the recovery channel, and the import volume in December was mostly higher in the year. However, according to statistics from the National Methanol Network, as of the 23rd, the inventories in the east of the country have dropped to 389,000 tons and the ports in south China have dropped to 101,000 tons. Judging from the currently known arrival forecast, there will be 25,000 tons of methanol entering the east China port on the 28th, with relatively more shipments to Hong Kong. Therefore, in a comprehensive view, the suppression of the domestic market by imported goods from the market still exists.

The continuing lack of traditional methanol demand will continue. The operating rate as of November 23 has been falling for two weeks in a row. At present, it is 60.4%. The signs of gradual shrinkage in formaldehyde production have already been reflected; in the case of dimethyl ether, the sales atmosphere of liquefied gas has picked up due to the gradual turning of the weather. Thus pulling the demand for dimethyl ether, the recent market conditions are acceptable, and the dimethyl ether emission rate has rebounded. As of the 23rd, its operating rate is 48.98%, which is close to the highest level in the year.

We believe that the growth of methanol demand in the future is still on the methanol to olefins, and its production is mainly concentrated in the northwest and north China. At present, the operation of Shenhua Huaning Coal and Datang Duolun's installation is still not stable, and Ningbo Qianyuan 600,000 tons/year MTO plant is expected to be put into production before the strong, which will bring 1.8 million tons/year of methanol consumption. In the long run, despite the recent downturn, demand for methanol still has some room for growth. It is still possible that the price of methanol will rise again.

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