Methanol Markets had a great year in 2017 due to strong demand from both MTO plants and downstream industries , and lower production capacity growth rate which led to higher prices and slow down slipping markets in warm season. by the start of spring , methanol producers kept on rising supply but demand from downstream industries weakened and prices dropped down in dearth of demand. but from April , restrictions on natural gas in china and multiple plants shutdown along with seasonal high demand pushed methanol prices up again.
Lack of production capacity growth in China and heavy drop in methanol imports made the market tighter avoiding more drag down in prices. Since January 2018, China's average methanol production in domestic section is 4.6 MT per month with a growth rate of 2.4% compared to 2017 methanol production. China's methanol production growth rate for 2017 in domestic section was 5.6% compared to 2016 which means it has turned into half in 2018. Meanwhile , China's methanol imports slumped to 610000 T in average each month that shows clearly there is a supply shortage in domestic markets.
MTO Plants shutdown and restart schedule :
- Baofeng geng Energy : 600000 T , Shutdown on June 7 , Restart on July 10
- Yanchang China Coal : 600000 T , Shutdown on May 30 , Restart in End of Jun
- Zhejiang Xingxing : 600000 T , Shutdown on May 25 , Restart on Jun 25
- Ningbo Fund : 600000 T , Shutdown on May 5 , Restart in July 2
- Datang Duolun : 460000 T , Shutdown on April , Restart Undecided
- Yangmei Hengtong : 300000 T , ShutDown on May 2 , Restart on May 20
- Ninjing Wison : 300000 T , Shutdown on May 22 , Restart on early Jun
- Zhongyuan Ethylene : 200000 T , Shutdown on May 5 , Restart in July
As methanol prices hike , MTO plants profitability lean and several shutdowns happened since Jan 2018. Official Reports shows , 3.7 MT of China's MTO plants capacities were shutdown since April due to high methanol price and lower profit. Methanol profits were risen up and reaching 107-110 $/T , however MTO plants profits were at 35 $/T.
Methanol supply doesn't seems to be much more higher during cold season this year but many huge capacity MTO plants that were shutdown since April and May due to higher methanol price and low profit , will be restarted in the end of July which will add up 1.8 MT to methanol demand . on the other side , by starting cold season , gas-based methanol production plants will reduce production capacity by gas consumption restrictions in China which means thighet domestic supply but demand side seems to be solid during cold season. methanol consumption in fuel applications is expected to increase by Q4 2018, Meanwhile some traditional demand from downstream industries come on the line in cold season for derivatives. Thus , Methanol markets are expected to be high and solid and rise in prices is inevitable due to supply shortage and growing demand.