In China, methanol prices decreased by 2.5% in the week of November 21, 2025, pressured by elevated imports and record port inventories. Delayed plant shutdowns in Iran and strong domestic operating rates kept supply high and squeezed producer margins, while downstream olefin and traditional sectors enjoyed modest profit recovery on the back of lower feedstock costs.
In China, methanol prices have fallen by 2.5% over the week ended November 21, extending the gradual decline since the third quarter of the year. High imports and record inventories at the ports were primarily responsible for the decline and continue to cast a pall on market sentiments.
Compared with the same period last year, China's methanol imports have seen steady increases since mid-year, reaching 1.736 million tons in August, 1.421 million tons in September, and 1.612 million tons in October. Imports for November and December will also be high, with port stockpiles remaining above 1.6 million tons, the highest in recent years. According to market participants, inventory pressure will not relax before the first quarter of 2026, considering Iranian methanol plants delayed shutdowns compared to last year and maintained strong overseas supply.
Domestic supply has also remained high. As of November 14, China’s methanol plant operating rate stood at 76.5%, with coal-based facilities running at 82.5%, coke oven gas-based plants at 59.4%, and natural gas-based plants at 50.6%. Although some natural gas-based plants are expected to start maintenance later in November, overall domestic production remains healthy. Overseas supply is similarly strong. Iranian plants such as ZPC, Kimiya, Sabalan, and Kaveh have continued operations, although partial shutdowns are expected later this month.
The imbalance between rising supply and sluggish demand has squeezed upstream margins. Coal prices have rebounded since September, driven by heating demand in northern China and restrictions on excess production. At the same time, this has increased costs for coal-based methanol producers, while falling methanol prices have eroded profitability, pushing some inland producers below break-even. Natural gas-based methanol plants in southwest China face even greater pressure, with persistently high gas costs exacerbating losses.
Downstream industries, by contrast, have shown a more modest recovery. Producers of olefins, especially Zhejiang Xingxing’s MTO plant, posted better profitability with lower methanol prices, slashing feedstock costs. Other traditional downstream sectors, which had been suffering since 2023, also saw margin improvements in the fourth quarter with support from a steep decline in methanol prices.
Looking ahead, ChemAnalyst expect methanol prices to remain weak and volatile in the short term. With imports projected to stay elevated, and port inventories unlikely to be drawn down this year, pressure on warehouse contracts will persist. Whether Iranian plant shutdowns tighten supply sufficiently to stabilize prices early next year depends on the timing and scale of shutdowns.
