Ample Methanol Inventories Slow Down the Asian Market Trading Activities

Shandong, China- With the healthy purchasing activities from Iran and the United States to the Asian market, Methanol remained well supplied with sufficient stocks to fulfill the downstream market.

In China, the spring turnaround season for the Methanol plant starts in March. An Inner Mongolian Methanol plant with a capacity of 900kt/Yr was shut down on Mar 15 for a 20-day maintenance period. A new 2.4 million Methanol plant being built by Ningxia Baofeng is scheduled to begin operations in mid-March. If the operation is successful, it will compensate for the loss of production at other plants.

With some plants restarting in Iran after the maintenance turnaround, the imports to the Asian market elevated, resulting in sufficient regional stocks. The May futures contract on the Zhengzhou Commodity Exchange closed on the lower market trend. The fresh Methanol cargoes are anticipated to arrive in April and increase the coastal inventory levels. Chinese Methanol futures and domestic Ex-tank prices fell due to weak downstream demand and healthy regional inventories.

In Southeast Asia, trading fundamentals for this month remain bearish with weak market fundamentals. End-user industries in the region have already stocked up for Ramadan, and trading activity usually slows during March with adequate stocks from the USA. Downstream enterprises were also affected by slow market offtakes, and Formaldehyde and Formic Acid producers were offering discounts on bulk purchases to the end users. In South Korea, the price of Methanol with the week ending on Mar 17 slipped to USD 379/ton CFR Busan with a weekly decline of 1.04%

According to ChemAnalyst, the price of Methanol in the Asian market will remain lower with limited trading activities among enterprises. Plant turnaround will not affect the prices in China much in the short term due to weak demand and adequate imports from Iran and Saudi Arabia. In the Southeast Asian market, the market suppliers will offer discounts on bulk purchases to clear their existing stocks.