Methanol: Prices remain firm and short still need to be cautious

China Paint Network
News: Last week, by the international crude oil price volatility and methanol spot market operation differentiation, China's methanol futures long-short differences continue to increase, MA1506 contract wide oscillation pattern, the weekly decline of up to 140 yuan / ton, the market short atmosphere has increased signs. However, the author believes that at present, China's methanol spot price is still strong, the market supply and demand structure continues to improve, the margin of futures discount spot is still too large, short methanol futures conditions are not yet mature.
spot prices remain strong. Last week, China's methanol spot market regional characteristics are more obvious, coastal and mainland spot price trends have been differentiated, Shandong, East China and other coastal areas affected by lower oil prices appear to varying degrees of decline, while the northwest, north China and other major production areas of factory prices continue to rise sharply. At the same time, according to the northwest and east China methanol spot business enterprises research, although the current price of methanol in East China is slightly weak, but manufacturers shipping more smoothly, inventory reduction faster, prices short-term down space is limited; The northwest region due to low inventory, lower downstream pick-up enthusiasm and more equipment maintenance and other factors, spot prices still have further mobilization.
supply and demand have gradually improved. Recently, China's methanol downstream industry continued to recover, formaldehyde, dimethyl ether and other traditional downstream industry start-up load increase significantly higher than methanol, the industry supply and demand relationship gradually improved. Data show that as of March 19, China's methanol industry weighted average operating rate of 54.33 percent, slightly lower than last week 0.28 percentage points, while China's formaldehyde, dimethyl ether industry average operating rate of 37.39 percent and 39.13 percent, respectively, up 6.46 percentage points and 0.45 percentage points from the same period last week. At the same time, with the increase of methanol intake in some olefin enterprises in northwest China and Shandong Province and the production of new olefin devices such as Xingxing Energy in Zhejiang Province, the supply and demand relationship of methanol industry is expected to be further improved under the background of some methanol devices being investigated and entered into daily maintenance due to environmental violations in northwest China.
From the historical statistics, the current three ports methanol stocks gradually returned to the normal level around 2012, especially in East China port by the local part of the olefin plant driving operation, methanol stocks fell more obviously. With the arrival of the downstream consumption season, it is expected that the port methanol inventory in the near future is still mainly a steady decline, and the port methanol inventory steady decline in methanol prices will form a strong support.
market structure is still in a multi-pattern. As of Friday's close, methanol futures 1506 contract closed at 2350 yuan / ton, while methanol futures designated delivery plant Kudingzhou Tianyuan factory price at 2300 yuan / ton, equivalent to the face price of 2560 yuan / ton; Shandong Minmetals Group factory quotation 2280 yuan / ton, folding plate surface 2480 yuan / ton; Inner Mongolia Xinao Energy factory price of 1980 yuan / ton, the plate surface of 2580 yuan / ton, are significantly higher than the current futures prices. In addition, from the position structure of methanol futures, MA1506 contract buy-to-let positions from the beginning of the week 11807 lots to the weekend's 21929 lots, while selling sets to hold positions from 2300 to 1500 lots, institutional customers are relatively firm in their long-term attitude.
In summary, although China's methanol market is facing a sustained decline in macroeconomic growth, the industry downstream earnings, low international oil price consolidation and many other adverse factors, but at present methanol futures are still in a strong finishing pattern, investors short methanol need to be extra cautious.