Looking forward to the middle of the year: Methanol market increases in price
Since the beginning of this year, although the domestic methanol market continues to maintain a strong operation, the price in the domestic market has gradually begun to decline as the supply volume has grown faster and the international market price has fallen.
In the first half of the year, prices are falling
In 2005, the domestic methanol market continued to operate at the high level at the end of last year, but supported by the tight supply of resources, the average methanol price in the East China market was stable at 2,750 yuan (t price, the same below). However, with the arrival of the holiday-intensive area in February, the production of downstream manufacturers started to decrease, and with the increase in domestic methanol production in March, the market supply pressure increased, and the average methanol price in the East China market dropped to 2,630 yuan.
In the second quarter, methanol prices rebounded due to rising domestic coal prices and tight natural gas supply. The average price of methanol in major domestic markets rose to 2,670 yuan. However, in June, the rainy season caused a decline in the downstream formaldehyde utilization rate, while acetic acid also entered a downward avenue. The reduction in demand led to an increase in the methanol factory inventory. As a result, the methanol ex-factory price was lowered again and again, and the average methanol price in the main market fell to 2,550 yuan.
Market support in the second half
It is expected that the domestic methanol market will still be supported by some positive factors in the second half of the year.
First of all, China's current macroeconomic situation is still operating at a high level. In the first quarter, China's GDP growth was 9.4%. In the first half of the year, GDP growth was 9.5%. The China and World Economic Research Center of Tsinghua University predicts that China's GDP will increase by 8.6% throughout the year. The stable operation of the economy provides good background support for methanol.
Second, downstream demand is very strong. The consumption structure of methanol in China is roughly as follows: 69% of methanol derivatives, 7% of fuel, 5% of solvents, 6.5% of medicines, 8.5% of pesticides, and 4% of others. With the rapid economic development, the market demand for methanol has increased rapidly in recent years. Since 2002, the apparent demand for methanol in China has grown at a rate of 22% annually. In 2005, the demand for methanol in China will maintain a good growth rate. From January to May, the apparent demand for methanol in China was 2.61 million tons, an increase of 13% year-on-year. It is expected that the total annual demand will exceed 6 million tons, which will set another record high.
The adverse effects gradually expanded
However, while seeing positive factors, we should also pay attention to the following factors that restrict the methanol market:
First, the adjustment of the macro economy has led to a reduction in the industry's boom. According to a report previously released by the National Bureau of Statistics, the national business climate index in the second quarter was 131.7, which was 0.8 and 2.7 points lower than the first quarter and the same period of last year. Under the background of macro-control, the degree of activity of the economy and the market, and the degree of prosperity of the industry will gradually decrease, thus constraining the operation space of the methanol market.
The second is that prices gradually fall from the top. Analyzing the methanol price operating cycle and observing the trajectory of the methanol operation in the first half of the year, we can see that the signs of methanol prices falling from the top of the cycle are more obvious.
Third, the current supply capacity has grown too fast. In recent years, due to strong demand, domestic methanol production has increased at a faster rate. From 2002 to 2004, domestic methanol production was 211, 299, 4.4 million tons respectively, with an average annual increase of 45%. At present, there are about 150 methanol plants in the country, and the production capacities in 2003 and 2004 were 600,795 tons, respectively. The capacity of the new expansion plant put into operation reached 3 million tons, and the growth rate reached 35%. While domestic methanol production capacity continues to expand, foreign methanol plants have also entered a new round of expansion peaks. Since last year, a total of 3.7 million tons/year of three large-scale methanol plants commissioned by Trinidad, Iran, and Saudi Arabia have been put into production, resulting in a substantial increase in methanol supply in Asia. Although the external dependence of methanol in China has dropped from 40% in 2000 to 24% in 2004 and further decreased to 19% from January to May of this year, the flow complementarity of resources determines that the domestic and international methanol market is extremely strong. Linkage effect. This year, the methanol price in Asia has been gradually declining. From January to June, the methanol price in Northeast Asia fell by 6 to 7 dollars a month, which is basically the same as the domestic market. It can be seen that after a new round of adjustments to the supply and demand structure of methanol and before a new potential demand market has been formed, the growth in methanol supply capacity has exceeded demand growth.
In summary, the domestic methanol market in the second half of the year is still supported by relevant parties and continues to maintain a relatively strong trend. However, as the influence of some unfavorable factors expands, prices will slowly decline.
In the first half of the year, prices are falling
In 2005, the domestic methanol market continued to operate at the high level at the end of last year, but supported by the tight supply of resources, the average methanol price in the East China market was stable at 2,750 yuan (t price, the same below). However, with the arrival of the holiday-intensive area in February, the production of downstream manufacturers started to decrease, and with the increase in domestic methanol production in March, the market supply pressure increased, and the average methanol price in the East China market dropped to 2,630 yuan.
In the second quarter, methanol prices rebounded due to rising domestic coal prices and tight natural gas supply. The average price of methanol in major domestic markets rose to 2,670 yuan. However, in June, the rainy season caused a decline in the downstream formaldehyde utilization rate, while acetic acid also entered a downward avenue. The reduction in demand led to an increase in the methanol factory inventory. As a result, the methanol ex-factory price was lowered again and again, and the average methanol price in the main market fell to 2,550 yuan.
Market support in the second half
It is expected that the domestic methanol market will still be supported by some positive factors in the second half of the year.
First of all, China's current macroeconomic situation is still operating at a high level. In the first quarter, China's GDP growth was 9.4%. In the first half of the year, GDP growth was 9.5%. The China and World Economic Research Center of Tsinghua University predicts that China's GDP will increase by 8.6% throughout the year. The stable operation of the economy provides good background support for methanol.
Second, downstream demand is very strong. The consumption structure of methanol in China is roughly as follows: 69% of methanol derivatives, 7% of fuel, 5% of solvents, 6.5% of medicines, 8.5% of pesticides, and 4% of others. With the rapid economic development, the market demand for methanol has increased rapidly in recent years. Since 2002, the apparent demand for methanol in China has grown at a rate of 22% annually. In 2005, the demand for methanol in China will maintain a good growth rate. From January to May, the apparent demand for methanol in China was 2.61 million tons, an increase of 13% year-on-year. It is expected that the total annual demand will exceed 6 million tons, which will set another record high.
The adverse effects gradually expanded
However, while seeing positive factors, we should also pay attention to the following factors that restrict the methanol market:
First, the adjustment of the macro economy has led to a reduction in the industry's boom. According to a report previously released by the National Bureau of Statistics, the national business climate index in the second quarter was 131.7, which was 0.8 and 2.7 points lower than the first quarter and the same period of last year. Under the background of macro-control, the degree of activity of the economy and the market, and the degree of prosperity of the industry will gradually decrease, thus constraining the operation space of the methanol market.
The second is that prices gradually fall from the top. Analyzing the methanol price operating cycle and observing the trajectory of the methanol operation in the first half of the year, we can see that the signs of methanol prices falling from the top of the cycle are more obvious.
Third, the current supply capacity has grown too fast. In recent years, due to strong demand, domestic methanol production has increased at a faster rate. From 2002 to 2004, domestic methanol production was 211, 299, 4.4 million tons respectively, with an average annual increase of 45%. At present, there are about 150 methanol plants in the country, and the production capacities in 2003 and 2004 were 600,795 tons, respectively. The capacity of the new expansion plant put into operation reached 3 million tons, and the growth rate reached 35%. While domestic methanol production capacity continues to expand, foreign methanol plants have also entered a new round of expansion peaks. Since last year, a total of 3.7 million tons/year of three large-scale methanol plants commissioned by Trinidad, Iran, and Saudi Arabia have been put into production, resulting in a substantial increase in methanol supply in Asia. Although the external dependence of methanol in China has dropped from 40% in 2000 to 24% in 2004 and further decreased to 19% from January to May of this year, the flow complementarity of resources determines that the domestic and international methanol market is extremely strong. Linkage effect. This year, the methanol price in Asia has been gradually declining. From January to June, the methanol price in Northeast Asia fell by 6 to 7 dollars a month, which is basically the same as the domestic market. It can be seen that after a new round of adjustments to the supply and demand structure of methanol and before a new potential demand market has been formed, the growth in methanol supply capacity has exceeded demand growth.
In summary, the domestic methanol market in the second half of the year is still supported by relevant parties and continues to maintain a relatively strong trend. However, as the influence of some unfavorable factors expands, prices will slowly decline.
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