ndbcasino| Thermal coal market is strong and methanol fluctuates downward: Supply and demand evolution and operational strategy analysis

editor2024-05-26 20:37:194Academia

News summary

The thermal coal market is strong and supply in producing areas is tight; short-term demand for methanol has weakened and price expectations are weak. Strategy recommendationndbcasino: Thermal coal fluctuates within the range of 2,550 - 2,700 yuan/ton, methanol arbitrage opportunities.

ndbcasino| Thermal coal market is strong and methanol fluctuates downward: Supply and demand evolution and operational strategy analysis

Newsletter text

The volatility of the thermal coal market has increased. The weak methanol in the producing areas shows that the thermal coal market has recently shown a strong operating trend. The market situation in the main producing areas is strong, and there are long queues of transportation vehicles. The coal mine is in a state of immediate production and sales, and the inventory remains at a low level. As the end of the month approaches and supply expectations tighten, coal prices will receive strong support in the short term. Although port inventories have maintained growth and low terminal demand have put some pressure on prices, as the summer peak electricity consumption approaches, the bottom support for coal prices is increasing.

The methanol market was affected by supply and demand, and price fluctuations intensified. In May, the amount of methanol arriving in Hong Kong fell short of expectations, resulting in port inventories falling to extremely low levels. However, the increase in mainland supply and the enhancement of negative feedback from olefins have significantly weakened the port basis and gradually loosened liquidity. The continuation of domestic spring inspections has led to a low operating rate of domestic methanol, but with the expectation of equipment restart, the supply will gradually pick up. Lower-than-expected methanol arrival in Hong Kong in May led to a slowdown in inventory growth, and import growth in June is expected to remain limited. Resistance on the demand side to high prices has increased, and coastal olefin units have been shut down or production has been reduced, resulting in a significant drop in operating rates in the MTO industry and a significant reduction in olefin demand.

Methanol market operation strategy recommendations Unilateral strategy recommendations focus on the volatile market in the short-term price range between 2,550 - 2,700 yuan/ton; in the arbitrage strategy, the increase in terminal arrival volume and the enhancement of downstream negative feedback indicate that the port basis may further weaken. The arbitrage strategy of MA9 -1 is biased towards reverse operations; in cross-variety operations, PP-3*MA recommends bargain-hunting expansion in the short and medium term, and maintains contraction logic in the long term. MA-UR09 is expected to remain volatile.

Risk factors in the methanol market deserve attention. Upward risks may come from macro favorable policies and uncertainty of overseas supply; while downward risks come from the sharp drop in coal prices and negative feedback from the olefin industry.

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