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China MArket Reports 26 April 2017

China MEG MArket Review

MEG market moved down earlier this week on heavy selling indications, tracking the downtrend in commoditymarket. The market then rebounded on the back of short coverings and the rise in commodity market. However,the prices fell sharply again in late session of Friday. Buyers mainly chose to wait on the sidelines. Polyesterplants enquired moderately and buying activities for forward goods were favorable. The highest and lowesttraded prices for prompt goods were at 5,960yuan/mt (Apr 21) and 5,690yuan/mt (Apr 19); for H2 May were at 5,950yuan/mt (Apr 21) and 5,700yuan/mt (Apr 19). USD market fluctuated upward and market sentiment was moderate. Forward cargoes kept premium over nearby. A few polyester plants sold in the market. CFRChina/China domestic MEG spread was at 130‐200yuan/mt. The highest and lowest transaction prices were$710/mt and $685/mt.
MEG inventory will decrease in Apr‐May, while the spot availability is still ample in the market. Prompt buying
from polyester plants was weak due to high contract usage. Some plants bought forward goods recently. MEG producers paid some attentions on cost factors on narrowing cash flow, but no producers showed intentions to lower operating rate. Buyers were still cautious amid the high correlation between MEG and commodities.

China MEG MArket Review

MEG market moved down earlier this week on heavy selling indications, tracking the downtrend in commodity market. The market then rebounded on the back of short coverings and the rise in commodity market. However,the prices fell sharply again in late session of Friday. Buyers mainly chose to wait on the sidelines. Polyester plants enquired moderately and buying activities for forward goods were favorable. The highest and lowest traded prices for prompt goods were at 5,960yuan/mt (Apr 21) and 5,690yuan/mt (Apr 19); for H2 May were at 5,950yuan/mt (Apr 21) and 5,700yuan/mt (Apr 19). USD market fluctuated upward and market sentiment was moderate. Forward cargoes kept premium over nearby. A few polyester plants sold in the market. CFR China/China domestic MEG spread was at 130‐200yuan/mt. The highest and lowest transaction prices were $710/mt and $685/mt.
MEG inventory will decrease in Apr‐May, while the spot availability is still ample in the market. Prompt buying
from polyester plants was weak due to high contract usage. Some plants bought forward goods recently. MEG producers paid some attentions on cost factors on narrowing cash flow, but no producers showed intentions to lower operating rate. Buyers were still cautious amid the high correlation between MEG and commodities.

Chinese Methanol Inventory at Ports

The arrival volume of imported methanol was about 132.5kt this week.
It is estimated that about 160.5-170kt of imported methanol will arrive from April 21 to end-April,including 92.5-100kt in Jiangsu, 35-40kt in Zhejiang and 33-43kt in South China.
Chinese Methanol Inventory at Ports .The arrival volume of imported methanol was about 132.5kt this week.
It is estimated that about 160.5-170kt of imported methanol will arrive from April 21 to end-April,including 92.5-100kt in Jiangsu, 35-40kt in Zhejiang and 33-43kt in South China.

China Methanol Market Forecast

For the methanol market in the inland areas, the environmental protection supervision will continue to curb the downstream demand in the near term. Meanwhile, the previously-stopped methanol units will restart gradually.
Thus, predictions show that the methanol prices in the inland areas may remain in a downtrend next week, and some high-end prices still have downside potentials. However, with the negotiation prices slipping further in the major producing areas, some traders and downstream users may purchase tentatively. Then the downward pace of the price may slow down. Whether the downstream users have stockpiling demand before the Labor Day holiday should be paid attention to. It is predicted that the prices will be in the range of RMB 2,050-2,150/mt in Inner Mongolia and RMB 2,250-2,400/mt in Shandong.
In the coastal areas, supported by concentrated resources, the methanol suppliers are trying to stabilize the market or lift prices. However, there are still many unfavorable factors, such as the quick price decline in the inland market, unstable prices and expected supply increases of imported methanol. It is predicted that the methanol prices in the coastal areas may be mainly fluctuate in the range of RMB 2,580-2,650/mt next week, but still have downside potentials in the long term.
Apr 26, 2017 16:58
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