Methanol Commodity Market Dynamics Report (Recent Update)

1. Price Trends
- Futures Prices: On May 26, 2026, the main methanol futures contract exhibited moderate volatility. Prices varied across different contract months—for instance, the MA2609 contract settled at RMB 2,862.00/ton, posting a slight increase from the previous trading day; the MA2608 contract settled at RMB 2,912.00/ton, also registering a modest gain.
- Spot Prices: According to Shengyishe, the benchmark methanol spot price was RMB 3,215.83/ton on May 22, 2026; RMB 3,211.67/ton on May 21; RMB 3,204.17/ton on May 20; and RMB 3,220.00/ton on May 19. Overall, recent spot prices have fluctuated within a relatively narrow range—exhibiting both gains and losses.

2. Supply-Demand Fundamentals
- Supply Side
- Domestic Production: As of the week ending May 8, 2026, the national operating rate across 186 methanol producers stood at 91.6%, up 2.29 percentage points week-on-week but down 0.58 percentage points year-on-year. Weekly output reached 2,059,835 tons, an increase of 51,450 tons (2.56% MoM), while declining by 7,040 tons (0.34% YoY). The high operating rate reflects near-full-capacity production driven by robust profitability; however, spring maintenance activities this year were comparatively muted due to profit constraints—although some units underwent scheduled shutdowns, the overall supply contraction effect remained limited.
- Imports: From January to April 2026, China’s methanol imports totaled 2.9692 million tons, up 3.64% year-on-year. In May, navigation through the Strait of Hormuz remains incompletely restored; although key Iranian methanol facilities—including those operated by KPC and Marjan—have gradually resumed operations, logistical bottlenecks continue to impede consistent export throughput. Consequently, May’s import arrivals are expected to remain below 500,000 tons—a historically low level.
- Exports: From January to April 2026, China’s methanol exports amounted to 284,800 tons, surging 160.33% year-on-year.
- Demand Side
- Traditional Downstream: For the week ending May 8, 2026, raw material procurement volume by traditional downstream methanol consumers stood at 29,500 tons—down sharply by 7,300 tons (19.84% MoM) and up only marginally by 900 tons (3.15% YoY). Slowing formaldehyde plant operating rates emerged as the primary drag on traditional demand, while incremental consumption from sectors such as acetic acid proved insufficient to offset the shortfall.
- MTO (Methanol-to-Olefins): During the same period, MTO producers’ methanol procurement totaled 212,880 tons—up significantly by 40,280 tons (23.34% MoM), yet down slightly by 920 tons (0.43% YoY). The notable month-on-month increase stemmed primarily from restocking demand following the scheduled restart of a major East China MTO facility; the year-on-year decline indicates no meaningful expansion in actual olefin-end consumption.

3. Inventory Status
- As of May 8, 2026:
- Sample port inventories stood at 922,000 tons—up 7,100 tons (0.78% MoM) and up 360,130 tons (64.09% YoY);
- Sample producer plant inventories reached 404,600 tons—up 52,367 tons (14.87% MoM) and up 100,690 tons (33.13% YoY);
- Sample social inventories totaled 1,326,600 tons—up 59,467 tons (4.69% MoM) and up 460,820 tons (53.23% YoY).
Synchronized inventory build-ups across all three dimensions signal not an isolated, localized phenomenon—but rather a systemic, upstream-to-downstream accumulation across the entire value chain.

4. Related Industry Developments
- Policy Updates: In the inaugural year of the “15th Five-Year Plan”, energy consumption assessments have fully transitioned to dual carbon-emission control frameworks. The methanol industry is among the first affected: the “Catalogue for Guiding Industrial Restructuring” now strictly restricts the expansion of coal-based methanol projects with single-train capacity below 600,000 tons/year. With the inclusion of methanol production into the national carbon market, estimated incremental carbon compliance costs are projected to reach RMB 80–120/ton.
- Corporate News: Shandong Lianmeng raised methanol prices and plans a scheduled maintenance shutdown in June; Mingquan Group’s methanol unit is undergoing maintenance; and the Brunei-based methanol facility has halted operations—all exerting localized influences on market sentiment and pricing.

Analysis & Assessment
1. Price Drivers
- Supply Pressure: Persistently high domestic operating rates sustain elevated supply levels. Although spring maintenance introduced minor curtailments, the net supply reduction was minimal. Concurrently, rising inventories across ports, producer plants, and broader social channels collectively weigh on methanol prices.
- Weak Demand: Sharp declines in procurement by traditional downstream users—coupled with the fact that the recent surge in MTO procurement mainly reflects restocking by a single restarted facility rather than broad-based end-demand recovery—leave demand fundamentally unable to provide meaningful price support.
- Geopolitical Factors: U.S.–Iran negotiations have entered a critical phase; partial restrictions on Strait of Hormuz navigation persist. While Iranian methanol plants have resumed operation, transportation constraints limit export volumes. Hence, May’s physical supply remains constrained—creating a genuine short-term supply gap that supports spot prices. However, markets have already priced in expectations of “de-escalating Middle East tensions and subsequent supply normalization”, contributing to recent two-day cumulative declines in futures prices.

2. Market Structure: Current methanol market conditions reflect a “triple pressure” scenario—high supply, weak demand, and systemic inventory accumulation—manifesting as a pronounced divergence between “strong physical fundamentals (low imports, positive basis)” and “weak forward expectations (high operating rates, inventory builds, anticipated geopolitical normalization).”

Outlook
1. Short-Term: Methanol prices are likely to consolidate within a trading range while seeking a bottom. Downside risks appear limited, yet upside catalysts remain scarce. A confluence of factors—including evolving Strait of Hormuz navigation status, pace of inventory drawdown, and any tangible improvement in demand—will jointly determine price direction. Traders are advised to adopt a range-bound, tactical approach—closely monitoring developments related to Hormuz navigation and port inventory accumulation trends.
2. Medium-to-Long Term: As dual carbon-control policies deepen and carbon market mechanisms take full effect, methanol industry consolidation pressures will gradually intensify. Should demand-side fundamentals fail to improve meaningfully, the current high-profit-driven overproduction incentive may prove unsustainable. Over time, structural adjustments in supply-demand balance could emerge—potentially impacting price levels. However, precise trajectory hinges on policy implementation fidelity and actual changes in industry capacity structure.