Methanol prices in China have been decreasing amid lower demand and normal-to-moderate supplies

Methanol prices in China have been decreasing amid moderate demand and normal production levels. The coal mines, major feedstock for methanol, have been operating normally despite the high summer temperatures, which typically increase coal consumption. This steady supply has not been met with a corresponding increase in demand, largely because high inventory levels are offsetting potential spikes in consumption, maintaining a surplus in the market.

On the demand side, the industries such as MTBE (Methyl Tertiary-Butyl Ether) and dimethyl ether, which are major consumers of methanol, are showing varied demand signals. For instance, maintenance plans at key facilities like Huayi and Hongye are temporarily reducing MTBE demand, while operational restarts in other regions hint at potential upticks. Similarly, the shutdown of the Henan Xinlianxin plant has decreased demand for dimethyl ether, although other facilities coming online or increasing production might offset this reduction. The formaldehyde sector further complicates the scenario, with some plants reducing operations and others ramping up, leading to an unpredictable demand pattern.

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Furthermore, the acetic acid and chloride markets in China are also not showing any signs of demand improvement. With major plants such as Tianjian shutting down for maintenance and others like Ineos poised for recovery, the demand for methanol in these sectors remains uncertain and uneven. Such fluctuations are critical as they influence methanol consumption directly due to its use as a feedstock in production processes.