Methanol ports are expected to have accumulated stocks, and it is difficult to see substantial improvement in urea demand
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Tuesday, Jan 23, 2024 at 5:28 PM
From a fundamental point of view, the start-up in mainland China is basically stable. This week, the average start-up rate of Zhuochuang methanol is 71.35%, and the start-up rate in northwest China is 82.72%, a slight increase from last week. Jiutai Tuoketuo's 2 million tons/year methanol unit will be installed in January 2024. It was shut down from January 5th to 11th. Shaanxi Weihua's 400,000-ton unit started maintenance for seven days on the 10th. Southwest gas plants restarted on the 25th, Jiuyuan and Sichuanwei on the 25th and 9th respectively.

From a fundamental point of view, the start-up in mainland China is basically stable. This week, the average start-up rate of Zhuochuang methanol is 71.35%, and the start-up rate in northwest China is 82.72%, a slight increase from last week. Jiutai Tuoketuo's 2 million tons/year methanol unit will be installed in January 2024. It was shut down from January 5th to 11th. Shaanxi Weihua's 400,000-ton unit started maintenance for seven days on the 10th. Southwest gas plants restarted on the 25th, Jiuyuan and Sichuanwei on the 25th and 9th respectively.


In terms of ports, the inventory of Zhuochuang methanol port this week was 845,000 tons, an increase of 10,000 tons from the previous period, indicating an accumulation of inventory. Overseas, the operating rate of external disks has dropped to a low level with the shutdown in the Middle East, and there is little change at present. Iran's Zagros PC and Majan devices are shut down for maintenance, and Kaveh is running at low load; Indonesia's KMI is currently running stably and plans to shut down for maintenance in the first quarter.


In terms of demand, port MTO maintenance has dragged down methanol demand. Xingxing MTO will enter maintenance on January 7, and Shenghong Sierbon MTO market is expected to fall negative. To sum up, the recent decline in daily thermal coal consumption and the weakening of coal prices have dragged down the cost side of methanol. From the fundamentals of methanol itself, China's supply is stable, and the decline in Iran's gas restriction operation has affected the arrival volume in February, but the arrival volume in January is still There is a large amount, coupled with the parking of some external MTO production, the port is expected to have accumulated inventory. The current profit of methanol is poor and the valuation is not high, resulting in limited space below. It is expected that methanol will maintain a wide range of fluctuations in the near future.


Urea: Spot quotation, Shandong 2238(-3), Anhui 2289 (-31), Hebei 2214(0), Henan 2230(-12)


China's urea market consolidated weakly yesterday, with market trading on demand and partial differentiation. On January 18, the national average market price of small and medium-sized particles was 2,299 yuan/ton, down 5 yuan/ton from January 17. On the supply side, the gas head equipment will all be restarted before the Spring Festival holiday according to the maintenance plan. The current daily output is 161,700 tons. Urea production continues to rebound and supply pressure increases;


On the demand side, winter replenishment has started in the northern region, but the focus is on bargain hunting, which has certain positive support for urea prices; on the inventory side, the total inventory of upstream companies in Longzhong this week is 542,000 tons, an increase of 24,100 tons from last week. Ton.


On the whole, it is difficult for China's foreign demand for urea to substantially improve at this stage, and there are expectations for the resumption of production of equipment, and corporate inventories may accumulate. It is expected that urea will maintain a weak and volatile pattern in the short term, and we will focus on demand and inventory conditions.


1. Methanol spot market conditions


Taicang market: Taicang methanol market continued to rise, with the price closing at 2440-2460 yuan/ton. The price increased by 37.5 yuan/ton from the previous month, and the overall spot transaction remained the same from the previous month, but the high price lacked obvious trading volume. Today we sampled 10 sellers and 4 buyers. In the morning, the intended spot sales price of those with goods was 2445-2450 yuan/ton, the buyer's intended purchase price was 2430-2435 yuan/ton, and the transaction price was 2440-2445 yuan/ton; low prices were hard to find, and the Taicang methanol market continued to rise in the afternoon.


The seller’s intended spot sales price is 2,460-2,465 yuan/ton, the buyer’s intended purchase price is 2,450 yuan/ton, and the transaction price is 2,450-2,460 yuan/ton. Although there are also offers of 2,465 yuan/ton and 2,430-2,435 yuan/ton for spot prices during the day, there are no actual transactions, so the above prices are not included in the final price assessment range. Based on a comprehensive evaluation of buying, selling and transaction prices during this period, the mainstream methanol spot price in Taicang is 2,440-2,460 yuan/ton, and the evaluation is mainly based on transaction prices.


Inner Mongolia market: The mainstream intention price of methanol in Inner Mongolia is 2050-2080 yuan/ton, which is the same as the average price of the previous trading day. Production companies offer shipments at a discounted rate, and downstream procurement is mainly based on demand, and prices are sorted and run. Zhuochuang Information sampled 3 methanol companies, which mainly ship goods, and the intended price is 2050-2080 yuan/ton; it collected 2 traders, who mainly purchase on-demand downstream, and the intended price is 2050-2080 yuan/ton. After comprehensive evaluation, the mainstream intended price is 2050-2080 yuan/ton.


2. Urea spot market conditions


China's urea market continues to operate weakly, and new orders are being followed cautiously. The industrial load of compound fertilizer and plate materials is low, and small quantities are purchased on demand. Some installations temporarily paused to increase, and the increase in spot supply was slightly slower.


Specific region: The market price in Linyi, Shandong is around 2,250 yuan/ton, with industrial companies following the dip and merchants following short-term orders. The market price in Heze is 2,237 yuan/ton. Compound fertilizer orders have become more rational. Agricultural demand has entered the market in an appropriate amount to follow up, and new orders have followed the market. The market price in Hebei is 2,214 yuan/ton. The province's industry is following up cautiously, and merchants are proceeding with new orders step by step.


At present, China's urea market continues to consolidate within a narrow range, and actual transactions are discussed one by one. The overall market trading atmosphere is light, and there is talk of loose pre-receipts from urea plants. It is expected that China's urea market may run weakly in the near future, and the focus of transactions in some regions may loosen under pressure.