In China, operation rates of methanol-to-olefins (MTO) facilities dropped to 60% or below. This is because profitability is deteriorating and supply of feedstock methanol is perceived to be tight.

While operation rates of MTO facilities had been at around 66% until September, all MTO facilities on the coastal areas were shut down as Nanjing Chengzhi suspended operation of facilities in October.

MTO facilities on the coastal areas are using imported methanol as feedstocks. With the Middle East situation worsening, import volumes from the Middle East including Iran sharply declined. As it is difficult to pass through the Strait of Hormuz and freight costs rose, this raised feedstock costs. As a result, supply is perceived to be tight on the coastal areas.

On the demand side, the major derivative polypropylene market remains soft and MTO facilities are not generating profit.

On the other hand, CTO facilities in Northwest China, which use domestic coal as feedstocks, enjoy good profit. In this situation, CTO facilities are operating at 80% or more of the capacity.

Turnaround status of MTO facilities are as follows.