In China, the methanol futures market is rising as crude oil prices skyrocketed due to a military conflict between Israel and Iran.
Regarding supply/demand fundamentals, both bullish and bearish factors are observed. Supply of imported cargoes is tight. Sellers of methanol are reluctant to sell as procurement costs for cargoes on hand and freight costs are high. In addition, entry is restricted at some ports in East China until late June and some cargoes are diverted to other ports.
On the other hand, methanol facilities are operating at high rates in China and supply of domestic cargoes seems to be ample. As for demand, it is difficult to pass on costs to prices for derivatives in the low-demand season.
Market players are paying attention to the impact of a conflict between the US and Iran on the methanol market going forward. Further, players are interested in the operation status of methanol and methanol to olefins (MTO) facilities in China.
With respect to facilities, Zhongmei energy chemical in Inner Mongolia started turnaround for its MTO facilities for 40 days from Jun 19. An MTO facility in Zhejiang reportedly reduced its operation rates to 70-80% of capacity.