China Methanol Sinks Below CNY 4,000 a Tonne as MTO Outages Spread and Port Stocks Rebuild

Market Pulse Scope's China methanol assessment, quoted in CNY per tonne on a national average basis, closed at 3,966.67 yuan a tonne on 16 October, down 880 yuan, or 18.2%, from 4,846.67 yuan a week earlier and below the 4,000 yuan level for the first time since mid-September. Changjiang Futures put the Taicang spot marker at 3,983 yuan a tonne in its 19 October weekly, a fall of 892 yuan, or 18.3%, on the week, while Inner Mongolia northern-line material was quoted at 3,115 yuan. The broker sees the January contract ranging between 3,000 and 3,600 yuan a tonne. The slide erases most of the risk premium built up during the Iran supply scare.

Demand is the driver. Methanol-to-olefins capacity utilisation fell 6.20 percentage points on the week to 73.49%, Changjiang Futures said. Longzhong put the combined coal- and methanol-to-olefins operating rate at 76.69%, down about three points, with Jiangsu and Zhejiang MTO plants running at just 20.06%. Nanjing Chengzhi's phase-one unit was scheduled to stop on 19 October, joining Tianjin Bohua and Lianhong Gerun, down since 10 October, Ningbo Fude from 19 September and Hengtong from 18 September, while Luxi, Xingxing and Sirbon remain offline. Guoneng Yulin's 1.8 million tonne methanol and 600,000 tonne olefins complex began a roughly 45-day turnaround on 10 October.

Supply is tightening at the same time, which is why the market has not fallen further. Domestic methanol operating rates slipped 3.21 points to 88.94% and weekly output dropped 77,500 tonnes to 2.0093 million tonnes, with only 82,500 tonnes of October cargo expected to arrive in the first half of the month, and Iranian plants remain largely shut. Port inventories did rebuild by 62,100 tonnes to 367,200 tonnes, but the build was concentrated in Guangdong, up 35,500 tonnes, and Fujian, up 58,200 tonnes, while Jiangsu, the key pricing hub, still drew down 20,500 tonnes to 171,700 tonnes. Inland plant stocks rose 34,600 tonnes to 356,850 tonnes.

Costs are moving the other way. Ordos Q5500 thermal coal at the pithead was quoted at 800-860 yuan a tonne on 16 October, up 35-40 yuan from the end of September, leaving coal-to-methanol margins around 1,060 yuan a tonne, while Bloomberg-sourced reporting carried by Mining.com described Chinese coal prices as being at a three-year high with little relief in sight. Traditional downstream demand is also softening: acetic acid operating rates fell 7.06 points to 76.57% and dimethyl ether slipped 2.60 points to 4.61%, while formaldehyde edged up 5.80 points to 36.12% and MTBE rose 1.23 points to 62.5%.

Brokers are split on how far the decline runs. Nanhua Futures argued that supply-side support has not fully disappeared because domestic turnarounds are rising and import arrivals are expected to fall, so further downside is constrained by low absolute inventories, while Zijin Tianfeng said near-month contracts stay supported on dips but back months should not be treated as a one-way trade. The next signals are the pace of MTO restarts, whether port stocks build for a second consecutive week, and the Middle East situation.