Methanol market did not see a strong pickup in demand after the Chinese Lunar New Year holiday as expected before, plus with high inventories at tank zones, so methanol prices kept falling. Formaldehyde market will gather little strength and delivery of DME goods will be restricted in coastal areas for the upcoming World Exposition. Currently, the operating rates of domestic methanol plants were less than 30%.
Stable domestic methanol supply in April and increase of overseas supply to China from Q2 alongside start-up of new Asian plants will turn the market into oversupply. Hence downstream users were hesitant to buy and most of them purchased on need-to basis. Several users in coastal areas said their demand was fulfilled by import contracts. Moreover, given that previous E-businesses lashed spot prices down, coupled with tight tank capacity and capital pressure, financing and speculating were constrained.
In general, buyers were cautious and some suppliers will face heavier inventory pressure.