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Insight | Time: Apr 14 2022 9:41AM  Editor:Louis Zou
Methanol supply and demand impacted by COVID pandemic
 
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China domestic methanol market has been moving downward since end-Mar, as demand and logistics were hit by the spread of covid pandemic, and the progress of plant maintenance in spring turnaround season was slower than expected.


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With the pandemic spreading since early Mar, logistics in Henan, Shandong and Hebei are affected with trans-province transportation slowing down or even shut. It is frequently heard that the delivery of products is hindered. In addition, the pandemic deals a blow to some downstream sectors such as formaldehyde and MTBE, leading to decline in plant operating rates.

 

The average operating rate of formaldehyde plants in China reached 38% in early Mar, hitting several years鈥 high, with resumption of production and startup of Shandong Lianyi鈥檚 1.2 million mt/yr formaldehyde plant in end-2021. Afterwards, however, with restricted logistics and weakening end-use demand, plant operating rate declined continuously.


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On supply side, the spring turnaround season is also delayed due to the pandemic. In Mar, China domestic methanol plants with combined capacity of 2.35 million mt/yr underwent maintenance, much less than earlier expected, while 100kt/yr capacity restarted. Several plants postponed the maintenance due to restricted personnel and equipment available for plant maintenance with the spread of covid-19 pandemic. The capacity of domestic methanol plants to conduct maintenance is expected to increase to 6.55 million mt/yr in Apr, and 5.85 million mt/yr in May-Jun.

 

Methanol plant maintenance in spring turnaround season (Apr 14 updated)

 

China methanol supply keeps ample in Apr, with some plants restarting after the maintenance. Methanol market is in the lack of advancing momentum, with buyers adopting wait-and-see approach while methanol importing rebounding. Methanol market is expected to keep weak in the short term with downward space capped after the sharp decline earlier.


[RISK DISCLAIMER] All opinions, news, analysis, prices or other information contained on this report is provided by analyst of Zhejiang Huarui Information Consulting Co., Ltd (CCFGroup) as general market commentary and does not constitute investment advice. CCFGroup will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
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