In November, prices of Chinese methanol had a sharp increase, especially from November 13th, methanol market once again usher in a wave of high. Many enterprises frequently raised the quotations. In the main producing areas such as Shanxi, Inner Mongolia and Shandong, enterprises stopped acceptance of orders. Market speculation is rising, and skyrocketing prices appear everywhere. Methanol price increased 6.80%, compared to the same period of last year, an increase of 24.39%.
The possible reasons for the price surge come from two aspects:
1. High freight cost
Since November, driven by the rise of international crude oil, Chinese gasoline and diesel prices continue to increase. The vehicle demand has increased significantly. The rates of main route of methanol freight have been sharply raised since the end of October, leading to the increase of delivery costs. What's more, part return goods is slightly slow, middleman didn't hold much goods, short-term tight supply intensifies the market.
2. Chinese environmental policy
Affected by by Chinese environmental policy, and under the background of insufficient start-up of methanol enterprises in Shanxi, Northern Jiangsu, the major olefin enterprises in South Shandong restarted the production. Port inventory continued to decline, demand for olefins in the regions increased, therefore the supply is tight. The situation also attributed to market speculation.
The current supply in many areas in China mainland is tight, and the factory stock falls to a low point, the short-term market support is strong. As the winter is coming and heat demand will rise, the traditional downstream demand is not optimistic, with the weaker power of accepting high prices. Above all, the methanol market price will maintain a high consolidation situation in the short term.