Methanol prices in China dip then edge higher recently amid shifting demand and supply conditions

• Methanol prices in China declined recently due to weak downstream demand and slower purchasing activity
• Large import arrivals and high port inventories increased market supply and pushed prices lower
• Port congestion and unloading delays reduced prompt buying activity in the market
• Methanol futures rose after the Spring Festival holiday and supported a modest rebound in spot prices
• Supply disruptions in exporting countries and higher crude oil prices improved sentiment and supported prices

Methanol prices in China moved slightly lower recently before showing a modest recovery, reflecting a market that remained largely stable despite shifts in supply conditions and post-holiday demand. Prices initially weakened due to reduced buying interest and ample product availability but later found support as market activity improved after the Spring Festival period.

Lower demand from downstream sectors, particularly formaldehyde producers and related chemical manufacturers, reduced purchasing activity across the market. With these industries scaling back procurement, trading activity slowed and contributed to the initial decline in methanol prices. Weak financial conditions among several downstream manufacturers also limited their ability to place new orders, which further restrained demand.

Supply conditions added additional pressure during the same period. Large volumes of methanol shipments arriving from international suppliers increased availability in the domestic market. At major coastal ports, inventories rose to elevated levels while storage space remained constrained, prompting traders to accelerate sales in order to clear stock. The combination of high inventories and limited storage created downward pressure on prices.

Logistical disruptions also influenced trading behaviour. Congestion at several ports and delays in unloading cargoes discouraged buyers from committing to prompt deliveries, which slowed transactions and contributed to the earlier price decline.

Market conditions shifted as trading resumed following the Spring Festival holiday. Methanol futures strengthened in early sessions after the break, which helped restore confidence among market participants and supported a modest rebound in spot prices. Coastal port prices also recovered in response to the rise in futures, providing additional support to the domestic market.

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Demand gradually improved as downstream industries restarted operations after the holiday period. The return of manufacturing activity increased consumption expectations and helped stabilise market sentiment. Rising global crude oil prices also lifted confidence across the chemical sector, which supported methanol values.

China’s dependence on imported energy and chemical feedstocks left the domestic market sensitive to developments in overseas supply. Production disruptions and shutdowns at major energy and processing facilities in key exporting countries tightened international supply conditions, which contributed to the slight increase in methanol prices seen recently.