A listed Chinese chemical company “calls to stop” production. On the evening of September 13, the company announced that its chemical production base would suspend methanol production.
Regarding the reason for the suspension, the company stated that due to the continued slump in the market sales price of methanol products, the price of its raw materials has continued to rise. If the production of the methanol system is resumed, the price of finished products will be inverted, and the product profit will be negative. The company’s management decided to temporarily suspend production of this factory’s methanol products. The follow-up company will decide the time to resume methanol production based on the market price of methanol products and the trend of coal price.
The coal price at the cost side continued to rise, and the company had to stop its methanol production.
The company said that although the company’s operating income in the first half of the year increased by 33.6% year-on-year to 1.379 billion yuan, the company’s net profit turned loss compared with the same period last year, mainly because the average price of Tongzi Chemical’s core raw material coal increased by 48.13% compared with the same period last year. As a result, production costs have risen sharply, and the gross profit margin of methanol has dropped to -15.86% from 11.46% in the same period last year.
The company stated that as of September 13, 2022, This factory had produced a total of 221,100 tons of methanol this year, with an operating income of 507 million yuan. The company’s temporary suspension of the methanol production line will lead to a year-on-year decline in the company’s methanol production and operating income in 2022.
The low price of methanol and the high price of coal have become two major factors restricting the profitability of methanol plants. Therefore, the future price trend of the two has become the focus of the industry.
A relevant person said: “Whether from the perspective of import and plant recovery, or from the perspective of new methanol plants, there will be a certain increase in methanol supply in the later stage, and the market driving factors may be in the stage of slow adjustment.”
Although entering September, due to the impact of the replenishment of downstream replenishment and the recovery of demand during the Mid-Autumn Festival, the price of methanol has reversed the previous downturn and has recently shown a rising trend, but with the gradual release of the expected increase in supply, the price may still decline in the later period. “At present, there is not enough motivation for methanol prices to continue to rise, so there is a certain probability that prices will weaken in the later period.”
Zhongtai Futures also said that methanol may remain strong in the short term, but it may be slightly under pressure to continue to rise. “The next step is to maintain a tight balance, with supply increasing month-on-month, resumption of production of pre-maintenance equipment, increased import arrivals, and expected recovery in downstream demand, maintaining a tight balance between supply and demand as a whole. In the short term, we will maintain a cautious and stronger approach, and in the long run we need to pay attention to downstream The acceptance of the current price, methanol continues to rise may face some pressure.”
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Post time: Oct-09-2022