Global methanol markets head into the new year foreshadowed by recessionary risks and global inflation. In addition, the Russia-Ukraine conflict will likely keep upstream prices volatile and unexpected spikes in energy prices and feedstock costs could lift methanol prices in the short term.
However, fundamentals in the first half of 2023 are expected to be bearish, due to sluggish downstream demand and low operating rates.
In China, structural weakness in downstream sectors and the broader economy are expected to weigh on petrochemical prices. Methanol-to-olefins plants have seen their margins narrow and turn negative and are under pressure to stop running. A number of companies plan to furlough their plants in December, with some expected to remain shut until after the Lunar New Year in early February, though others could also remain offline indefinitely, sources have said.
Highlights:
- China re-opening uncertain
- Europe likely to remain dependent on US import volumes
- US to slow run rates amid weak domestic demand
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