After the methanol market shock will become the main theme
On January 8, a leading newspaper analyzed and forecasted the methanol market trend for the spring season, suggesting that the recent decline since November last year was nearing its bottom. It predicted that the market would soon stabilize and begin to rebound. However, it also noted that methanol is unlikely to outperform dimethyl ether (DME) in the short term, and a sharp price increase is not expected immediately. Instead, the market is expected to gradually stabilize. This week’s market movement has largely validated the newspaper's prediction.
Driven by the previous DME market performance, most domestic methanol producers raised their ex-factory prices last week. In particular, methanol prices in Shandong, Hebei, Henan, and Shanxi saw widespread increases, with many companies raising prices online. While international methanol prices continued to fall, the domestic market showed an overall rebound.
In North China, after recovering in the previous week, the market continued its upward trend, with prices reaching between RMB 2,450 and RMB 2,800 per ton. Prices increased by RMB 150 on both ends compared to the previous week’s rise of RMB 100. Other regions followed suit, with East China seeing prices rise to RMB 3,100–3,300, with the lower end up by RMB 100. Central China’s prices reached RMB 2,600–2,850, with both ends increasing by RMB 150. South and Northeast China remained relatively stable, while the Southwest and Northwest markets were slightly weaker, with the Southwest falling by RMB 100 and the Northwest dropping by RMB 50 at the high end.
A comprehensive analysis of the current methanol market shows that multiple factors are balancing each other. International crude oil prices are gradually declining, narrowing the gap between external and internal prices. Meanwhile, downstream sectors such as formaldehyde and acetic acid remain in off-season, with limited demand growth. Additionally, new methanol projects have started production, and the recent DME shortage has eased, which has somewhat restrained the rebound momentum of methanol.
However, despite the sharp drop in the DME market, the overall price remains slightly higher than before the Lunar New Year. Currently, the DME start-up rate is high, and there is increased methanol absorption. Combined with the six-week price decline in the methanol market, many downstream companies have low raw material inventory levels. With the Spring Festival delivery period approaching, the market has seen active purchasing under the psychological pressure of "buying or not buying," leading to tighter supply conditions. At the same time, formaldehyde prices have also risen.
Therefore, it is expected that the domestic methanol market will experience limited volatility, with major ups and downs being unlikely. Instead, the market is likely to enter a phase of consolidation and adjustment, with price fluctuations remaining moderate.
Xuzhou D.C. International Trading Co., Ltd. , https://www.tfgyspackaging.com