Recently, I went to Xi’an with the delegation to investigate methanol production and downstream demand for methanol automobiles and clean fuels. From the survey situation, although methanol prices are low and coal prices are high, many manufacturers are close to the loss point, methanol is difficult to continue to fall, but due to lack of demand power, methanol rise still needs to wait for time to cooperate.
| Azodicarbonamide (AC foaming Agent) |
New Growth Point of Methanol Demand: Energy Demand
The new consumption of methanol mainly comes from energy demand, which is in great demand in Xi’an area we investigated. There are two main parts in this respect, methanol automobile and clean fuel.
As for methanol vehicles, on March 19, the Ministry of Industry and Information Technology of China and other eight departments jointly issued the Guiding Opinions on the Application of Methanol Vehicles in Some Areas, which put forward that the application of M100 methanol vehicles should be accelerated in areas with good resource endowment and operation experience of methanol vehicles, such as Shanxi, Shaanxi, Guizhou and Gansu. Shaanxi is expected to invest a total of 20,000 methanol taxis. Now it has invested 7,000 methanol taxis in Xi’an. Now it needs about 100,000 tons of methanol per year, and 300,000 tons after completion. The plan has been running for five months, and three problems have emerged. One is that additives are easy to block the nozzle and cause faults; the other is that it is difficult to ignite by gasoline before converting to methanol; the third is that it is difficult to refuel. Due to government subsidies and other factors, it is impossible to enter CNPC and Sinopec gas stations. Only 20 gas stations in Yanchang Petrochemical Company in the city can add M100 methanol and taxis. There is a serious queue during shift time. But generally speaking, these problems are not insoluble, and they can basically accomplish their tasks in the later stage.
In the aspect of clean fuel, there is a gap in natural gas after coal to gas conversion. At the same time, because there is no pipeline natural gas in many remote areas, liquefied natural gas needs to be used, which has potential safety hazards. Methanol fuel has developed rapidly in recent years. The total annual demand in Xi’an is about 300,000 tons, and the demand in winter is even greater. The national estimate is more than 3 million tons.
Later Focus: When Demand Warms up
On the mainland side, we are concerned about when the demand for new olefin plants will start. Jiutai, Inner Mongolia, 1.8 million tons of coal to methanol has been put into production, but the corresponding 600,000 tons of MTO failed to produce the finished product smoothly due to plant problems, and a large number of takeout methanol hit the market. At the same time, there is news recently that the export of Tang Dynasty Toronto methanol has been reduced, and that the MTP plant has been restarted. Once these two sets of devices start up, the domestic supply-demand relationship will be greatly improved.
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On the port side, we should pay attention to inventory changes. At present, the methanol inventory in coastal areas is 912,200 tons, and the total methanol negotiable supply in coastal areas is estimated to be around 265,600 tons. Although it has declined, it is still high compared with 450,000 tons in the same period last year. At the same time, considering that the import arrival volume increased to 470,000 tons (generally 300,000-350,000 tons) in the next two weeks, the port inventory is still under great pressure.
On the downstream side, we should pay attention to whether the price of chemical products has improved. Compared with methanol prices, the recent downstream polypropylene and ethylene glycol continued to decline due to the escalation of trade frictions. Especially ethylene glycol declined the most, and the downstream factories suffered serious losses. Zhejiang Xingxing and Changzhou Fude, two important benchmarking enterprises in East China, both have propylene and ethylene glycol. In this case, it is difficult for enterprises to support the upstream price increase.
Generally speaking, manufacturers generally reflect that downstream demand is generally relatively low except formaldehyde. Traders have a general willingness to receive goods, and the price will be suitable for some parts. Once the price rises, it will be difficult to ship goods. In the short term, prices will rise inexplicably, and producers will mainly digest inventories at low prices. It is possible to improve after the start of construction in Datang and Jiutai. Short-term advice is mainly wait-and-see. In the long run, the price is at the bottom of the range, which can be more light warehouse tests.
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