Methanol: The tight supply situation will subside

Although the new crown pneumonia epidemic is still spreading and the supply will be short of demand for a long time in 2020, market participants still predict that the tight supply situation in the global methanol market will ease in 2021, and idle production capacity will return to the market
.

Especially after Biden won the US presidential election, new methanol plants may be put into operation one after another, combined with potential changes in trade flows, may also cause oversupply

China's demand growth or slowdown

Supported by the surge in retail sales of consumer goods in China and the strong growth in gross domestic product (GDP), the Chinese methanol market entering the first half of 2021 will bring new vitality to the downstream market
.

The price of imported methanol in November 2020 increased by 10% year-on-year, with an average price of US$238/ton (CFR, China)

At the same time, the profit of polypropylene in 2020 has brought huge profits to the methanol-to-olefins plant, but entering 2021 may face unfavorable factors such as China's new polypropylene plant and the rising cost of raw methanol
.

China's newly added polypropylene production capacity in September 2020 is 1.

U.
S.
and European supply will be surplus

Although methanol inventory levels in Europe and the United States are low at the end of 2020, the European and American markets are likely to experience oversupply in the first half of 2021
.

Mainly a series of unplanned shutdowns in the third and fourth quarters of 2020, alleviating the downturn in demand caused by the epidemic

In the second half of 2020, due to the restart of some idle devices, the market supply will increase, which will have an impact on market prices in the next few months
.

In addition, market participants said that with the commissioning of the first 1.

　　After these new devices are put into production, there may be more imported goods in Europe
.

Uncertainty still exists in Tomet's 900,000 tons/year methanol complex.

　　India market supply structure or change

　　At the same time, in the Indian market, due to the uncertainty of Iran's supply recovery, there may be tight supply in the first half of 2021
.

After the outbreak of the new crown pneumonia, India might have absorbed more methanol supply because of weak demand in some neighboring markets

　　Although the United States lifted the sanctions exemptions for countries that import Iranian oil in May 2019, the buyer made full use of relatively loose banking regulations and customs regulations.
Therefore, before February 2020, Iranian methanol accounted for about India’s imports.
75%
.

According to Indian customs data, from March to August 2020, Iranian methanol only accounted for 6% to 7% of all its monthly imports