Minmetals Futures Chongqing Business Department
Author: Li Jing Liu Jiewen
Key takeaways from the report
In December, the domestic methanol output was 7.47 million tons, an increase of 630,000 tons or 9.2% year-on-year. Imports in November were 1.4 million tons, a year-on-year increase of 500,000 tons. In December, 1.45 million tons of domestic methanol arrived in Hong Kong, a record high for the same period in history, and the external demand weakened and the goods shipped to China increased significantly. In December, affected by Iran, Indonesia and other devices, the start of the outer disk device fell to the low level of the same period, the loading in January fell significantly, and the arrival in February will fall back to the level of 1 million tons, so the pressure on port supply in February is expected to ease. The short-term closure of ports has led to the postponement of cargoes, the strengthening of the port basis, and the increase of supply-side disturbances. Domestic start-up maintenance at a high level, pithead coal prices continue to fall, methanol costs move downward, coal performance is weak, it is expected that the follow-up costs still have some room to move down, the current coal enterprise profits are neutral year-on-year, gas profits are low.
The parking of MTO devices at the port has declined, the start of external mining devices has declined rapidly, and the short-term demand has fallen. At present, the operating capacity of olefins in East China is 74.48%, which is relatively neutral year-on-year, and MTO profits are still low. The overall seasonal weakening of traditional demand is dominant. On the whole, the short-term decline in demand is mainly undertaken, and it is difficult to have a bright performance.
In terms of inventory, the port unloading in the early stage was less than expected, and the port just needed to consume, and the port inventory was at a high level to a neutral position in the same period. Subsequently, domestic arrivals returned to a high level, enterprises started to pick up, and the short-term port is expected to still have some pressure on the warehouse, but the reduction in imports in February will also ease the pressure on the port, and the overall contradiction is expected to be relatively limited. The postponement of the restart of equipment in the mainland has led to an improvement in the sentiment of downstream goods, and the inventory of enterprises has continued to deplete, which is at a low level year-on-year, and the current inventory pressure of enterprises is small.
Due to the impact of large-scale parking in the early stage, the import decline in February is more certain, and the follow-up port pressure is expected to be relatively limited, while the mainland inventory continues to remain at a low level, and the start of construction is at a relatively high level. The short-term positive logic of the support disk continues. From a unilateral point of view, the contradiction of methanol itself is not prominent, and it is difficult to have a large-scale unilateral trend, and the absolute price range still depends on the trend of coal.
Supply side:
Coal continues to fluctuate and weaken, the cost range of coal chemical industry has moved downward, the overall supply of coal is high, the current demand is difficult to support the continuous high price operation of coal, the inventory of downstream power plants is not low, and the demand is relatively flat.
Domestic start-ups remained at a high level, with the weakening of raw materials and the rebound of spots, the profits of coal production improved significantly, but the profits of gas production remained at a low level in the same period. In the medium and long term, the profit level of the methanol industry is expected to gradually rise.
Demand side:
The port device was stopped, the high level of olefin start fell back, and the demand margin was lower, but the downstream short-term centralized replenishment of the reservoir released the demand. Most of the traditional demand fell back to a low level, and the performance was weak.
Inventory:
In the early stage, due to the delay in unloading and downstream replenishment, the inventory has been reduced from a high level to a neutral position. The inventories of mainland enterprises remained at a low level over the same period, and the current social inventories have been neutrally low year-on-year. The raw material inventory of downstream manufacturers has reached a high level in the same period.
Disclaimer: The information in this report is derived from public information or field research, our company and researchers do not make any guarantee for the accuracy and completeness of the information, the information and opinions in this report reflect the judgment of the report when it is first released publicly, and may be adjusted at any time, and the information and opinions in the report do not constitute investment offers or trading recommendations, and investors have nothing to do with the investment decisions and results made on this basis and the company and the author. Investment is risky, and you need to be cautious when entering the market.