Higher methanol market price triggers panic selling

At the end of March, the operating rate of domestic methanol companies suddenly increased sharply. The supply of products increased sharply and market prices fell down. Panic selling took place. The ex-factory price in eastern China dropped from the previous average price of 2,850 yuan (t price, the same below). 2730 yuan, the end of the spring of this wave of time span of more than a month of slow rebound. While looking at the changes in supply and demand, the impact of import factors, and the trend of downstream demand, the short-term methanol market will continue to fall to seek support. A sharp sell-off followed by a slight fall or will become the basic pattern of the trend, fear can not afford the " A bucket" Quotes.

The rebound of the initial spring wave of alcohol was not a change in the relationship between supply and demand, but was related to the centralized production and maintenance of some important production enterprises, the low operating rate, and the sharp drop in market supply. At the same time, due to long-term price constraints and impacts, production and circulation are generally concerned about inventory impairment losses, so the overall inventory is scarce, so as the weather warms, the lower reaches of the market can push up prices.

In recent years, methanol has expanded rapidly and its production scale has far exceeded actual effective demand. For example, the 200,000 tons/year methanol project for the comprehensive utilization of coke oven gas in Dagang, Sichuan Province, was opened in March this year. The successful production of refined methanol on April 5 is one example. According to the latest statistics from China Nitrogen Fertilizer Industry Association, in 2012, China will have more than 5.5 million tons of new methanol plant put into operation, and the total production capacity is expected to reach more than 52 million tons. At present, the annual consumption of methanol is only about 22 million tons, and the divergence between supply and demand is very serious. Correspondingly, the industry can only maintain about 50% of the operating rate, and a large number of production capacity is idle. In this case, if there is a partial rise in the market, these idle capacity will always play a role. As a result, a huge amount of products have arrived, and the fragile market has no leverage. The price of methanol is not surprising.

The consequence of this situation is that companies that drive in advance cannot take measures to restrict production, or even stop production and maintenance; and the price of subsequent driving devices facing cooling will also gradually converge production impulses and drastically reduce production. It can be seen that the industry has completed one cycle of rebound from profit to loss and profit.

Over the years, manufacturers in Iran, Saudi Arabia, Oman and New Zealand in the Middle East have expanded their methanol exports to China on a yearly basis with cheap natural gas feedstock resources. In 2010, China imported 5.19 million tons of methanol from the above-mentioned countries and reached 5.9 million tons in 2011, accounting for 1/4 of domestic consumption. In addition to the advantages of raw materials, as the circulation companies and the above-mentioned overseas production companies have signed long-term contracts, resulting in very low import prices, such as Eastern China CIF price of only 2,000 yuan, the competitive advantage is quite obvious. Overseas methanol has always been in the eyes of the domestic methanol market. Currently, the reserves in the port canisters are maintained at 500,000 to 600,000 tons every year. Imports of methanol will impact the domestic market at any time.

Domestic methanol is not competitive with imported methanol, mainly due to cost factors. About 70 percent of China's methanol plant is coal head raw material, and the coal price has a great impact on the cost of methanol. At present, the price of raw coal is steadily rising and the price generally reaches 1,700 yuan, which is not an opponent of natural gas companies at all. In addition, even though there are some natural gas methanol companies in China, they are affected greatly by the season, especially the winter gas shortage will have a great impact on their production and operation.

The impact of overseas methanol on the domestic industry may increase. The main reason is that after Iran suffered economic sanctions such as the EU, it blocked the export of methanol to the EU. In order to transfer and digest huge amounts of methanol, Iran has adjusted the focus of methanol sales to the Asia-Pacific region, of which China and India are the main exporters, accounting for its More than 40% of the export volume. In addition, Iran's inflation is serious, reducing the purchasing costs of importing countries, but is more conducive to its foreign sales of methanol.

Downstream demand is stagnant Although the major downstream markets such as methanol gasoline, formaldehyde, dimethyl ether, and acetic acid have long been promising, the explosive growth with methanol cannot be matched, and it is difficult to sustain a dramatic increase in methanol production capacity.

At the CCTV “3·15” party this year, after the liquefied petroleum gas industry was commonly exposed to dimethyl ether, all localities increased the crackdown on the detection of adulteration behaviors, and the demand for dimethyl ether continued to shrink, eventually quitting this completely. An abnormal consumption area. The application of dimethyl ether is still at an exploratory stage. Bottlenecks in some industries have not yet effectively broken through, and it will take a long time for large-scale promotion.

With rising oil prices and growing demand for environmental protection, methanol fuel as an alternative to clean bio-energy can help promote its use. Although China's methanol fuel has entered a substantive application stage, the relevant departments in 2010 introduced the "methanol gasoline vehicle (M15)" standard, and in May last year in Shanghai, Shanxi and Shaanxi to carry out a high proportion of pilot programs of methanol gasoline promotion. However, if the combination of fuel ethanol gas that began to be promoted ten years ago is considered, the timing of large-scale promotion of methanol gasoline is not yet available.

Downstream, another major product of formaldehyde, has a weak demand due to its close relationship with the real estate industry. As we all know, in order to curb the rapid rise in house prices, the country has implemented comprehensive measures to cool down the real estate industry in the past two years and will affect the related construction, building materials and furniture decoration industries. Formaldehyde is the main raw material for the adhesives in the sheet metal industry. The downstream hindrance naturally affects the upstream, and this conduction effect is eventually reversed to the methanol industry.

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Luoyang Hong Xin Heavy Co., LTD. is located in Luoyang Xin'an Industrial Park, Luoyang Hongxin Heavy Machinery Co., Ltd is an enterprise featured with industrial designing, processing and manufacturing, which is qualified for import-export trade. Covering an area of 15,000 square meters and holding an annual production value of 80 million RMB, the company of 20 million RMB registered capital has total 100 staff members, among which there are 20 engineering technicians owning senior and medium professional titles and 40 intermediate and senior technicians capable of product designing and developing.
Hongxin is dedicated to produce reducers, hoists, crushers, Ball Grinding Mills and the equipments of screening, coal washing, metallurgy and cement, and replacement parts. Meanwhile, we provide the perform maintenance service for various series of equipments. There are 52 large-scale equipments applied into the manufacturing process, such as T200 CNC floor boring and milling machine, YK 73125 CNC molding gear grinding machine, YK322B CNC molding gear grinding machine, Y3200 gear hobbing machine, Y1600 CNC gear sharper, 4m vertical lathe, 6.3m CNC vertical lathe, T110 CNC boring machine, and 52 middle-sized productive and assistive equipments, which integrate strong manufacturing and processing capability with complete managing system of production and technology, quality management system and comprehensive testing measures.

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