China methanol prices surged by a total of 3.8% in the period through 16 January 2026 due to production maintenances-induced disruption of supply, difficulties in Iranian imports, geopolitical concerns, and restocking in the downstream during the holiday season, despite ample supplies were stored in the port storage terminals in China.
Chinese methanol prices increased by 3.8% in the week ended 16 January 2026, which is ascribed to a combination of supply constraints, geopolitical matters, and a slow recovery in downstream purchase demand. The overall trend of Chinese port methanol markets mainly went upward due to increases in port prices, greater imports to produce olefins, and holiday rebound purchases in the downstream market. Meanwhile, coal prices offered only limited support due to a slow rebound in restocking demand, while the overall cost factors were slightly positive, contributing modestly to the price rise.
As for the demand side, olefin demand in mainland China had remained stable, but volume in traditional industries had fallen, resulting in a widened supply and demand gap. Most of the downstream products were methanol-driven, but lower demand in the main industries led to a bearish market trend. This trend has eased, as downstream demand began to improve due to the impending restart of methanol-to-olefin plants in late January, and the northwest methanol plants had secured 94,200 tons of orders, up 15,700 tons from the previous month.
The maintenance at the Inner Mongolia Jiuding factory led to a decrease in total production, although the Zhongyuan Dahua factory, which remained closed in the previous month, returned to operation. Coal-fired methanol production lines were running at 103.6% capacity, which increased by 1.1% points from the previous month, and natural gas-fired methanol production lines were running at 48.4%, which led to a 2.5% fall in capacity utilization.
Tensions in the Middle East, particularly in Iran, have pushed the price of crude oil to its highest level since early December 2025 and are having an impact on methanol market sentiment. Iran is a main source of methanol to China at low capacity. A total of eight production lines, with an annual capacity of 13.85 million tonnes, have been shut down at present. Projected January methanol loadings from Iran were expected to decline by 11%, contributing to overall import tightness.
In terms of domestic inventory levels, these remained high. This included the port inventory level of 1.5372 million tons as well as the inventory held by mainland manufacturers at 447,700 tons. It appears that market condition-wise, the market is now under the influence of ‘weak reality, strong expectations.’
Looking forward, the coming drawdowns of inventories before the Spring Festival, the progress in resuming MTO and downstream production, and Iranian supply dynamics will be closely watched by the market. The methanol home port stockpiles and geopolitical risks will keep volatility over the near term, while the recent 3.8% recovery supports sensitivity to disruption to supply or more purchases from downstream.
