China methanol supply and demand growth to both slow down

International crude oil fell back recently, and China methanol market was little changed with some corrective downward movement in the first week after the holiday. In the lack of advancing momentum, the market focuses on the arrivals of imported cargoes, China domestic and overseas plant operations.

Based on the schedule of cargo arrivals, China is expected to receive about 1.2~1.25 million tons methanol in Oct, down by more than 90kt from 1.34 million tons in Sep. Shipments from Iran loaded in Sep reduced obviously, which would led to a decline in China's methanol imports in Oct.

In terms of plant operations outside China, the scenario was little changed in Iran, with most plants running stably. However, the loading of cargoes remained slow, due to low capability of shipping recently. In addition, those plants could be affected by gas restrictions toward the end of the year and then plant operating rate could get cut.

In other regions, US Natagasoline's 1.75 million mt/yr methanol plant was hut unexpectedly on Sep 8 and then got restarted on Sep 27, but shut again in early Oct with restart date undecided. Qatar's QAFAC shut its methanol plant on early Oct for maintenance lasting 45-60 days.

On demand side, operating rates of methanol's downstream MTO and acetic acid plants have reached this year's high. In the future, some CTO plants in interior regions are expected to either shut or cut operating rates, but as integrated methanol units would undergo maintenance at the same time, it could impact methanol supply and demand to limited extend.

In a conclusion, methanol imports are expected to reduce in Oct, and demand peak is coming to an end. Methanol supply and demand are expected to keep largely balanced with inventory decreasing slightly. The price may keep consolidation, dependent on macroeconomic scenario.