[Introduction]: As of the evening of July 22, the main methanol futures contract broke through 2,500 yuan/ton, and reached a maximum of 2,505 yuan/ton. Compared with July 15, the largest increase reached 229 yuan/ton, a month-on-month increase of 10.1%. At present, long and short factors are intertwined, and the mentality of the industry is divided.

Figure 1 Comparison of methanol production and price in China



Data source: Longzhong Information

Inland supply is abundant. According to statistics from Longzhong Information, as of July 21, China's methanol weekly output was 1.5088 million tons, a decrease of 27,100 tons from last week, and the plant capacity utilization rate was 74.72%, a month-on-month decrease of 1.34 percentage points, which has been declining for four consecutive weeks. Judging from the weekly average, this year's average weekly output has reached about 1.58 million tons, an increase of about 100,000 tons year-on-year, but the situation this week has been lower than this year's average. Although recently, some areas such as Shanxi and southern Shandong have limited production by coking enterprises, but at present, the total limited production is not much, and we will pay attention to the later changes. In August, Inner Mongolia Xinao Phase I 600,000 tons/year, Inner Mongolia Rongxin Phase I 900,000 tons/year and Shaanxi Shenmu 600,000 tons/year have maintenance plans, but Shanxi Xin 300,000 tons/year, Zhongyuan Dahua 50 tons/year 10,000 tons/year, China Coal Energy Chemical 1 million tons/year, Jinmei Huayu 1.2 million tons/year, Shaanxi Changqing 600,000 tons/year and Anhui Huayi 600,000 tons/year are planned to restart. , the domestic public supply of methanol will not be reduced in the later period.

In terms of import volume, affected by the recent decrease in the number of shipments in Iran and other places, the import volume in August may be lower than expected, but it is necessary to pay attention to the supply guarantee of downstream enterprises.

Figure 2 Comparison of methanol stocks and prices in China

 

Inventory is high. Although the total methanol inventory in China has averaged around 1.37 million tons in the past three weeks, it is still at a high level. As of July 20, China's total methanol inventory reached 1.3715 million tons, a decrease of 85,800 tons from the previous month, and an increase of more than 210,000 tons compared with the average in the second half of last year. At present, the downstream demand is relatively weak. From the perspective of methanol companies, keeping the inventory low is the current main sales strategy. For this reason, since June, the weekly average inventory of methanol companies has hovered around 400,000 tons, and short-term fluctuations may be large. Sex is not high. Although the port inventory has been reduced for four consecutive weeks, it is still above 900,000 tons. In the later stage, although there is a possibility of continuing to go to the warehouse, it is necessary to pay attention to the later loading plan, weather and contract execution of downstream enterprises.

In addition, Powell has said that the Fed will discuss raising interest rates by 50 or 75 basis points at the FOMC meeting on July 26-27, while the comments of many policymakers have focused on 75 basis points or higher. Some industry players believe that once the Fed continues to raise interest rates, it may have a bearish impact on commodities, but others believe that after the Fed raises interest rates, the short-term negative factors have been released, and moderate bargain-hunting may be an attempt. While both of these views are valid, it is also important to pay attention to changes in crude oil and the impact of most commodities on sentiment.

To sum up, in terms of the expected reduction in imports in August and the production limit of mainland coking enterprises, the fundamentals have slightly improved, but we still need to pay attention to the impact of changes in crude oil and cyclical changes in the domestic economy on real estate and other terminal industries. Therefore, I suggest that, Do more with caution.