Core Viewpoint - Methanol prices have ended a downward trend since July of the previous year and have entered an upward market in 2026, supported by low valuations, expectations of inventory reduction at ports, and geopolitical factors that have increased price volatility [1] Group 1: Inventory and Supply Dynamics - Methanol port inventory has been in a seasonal accumulation cycle since May of the previous year, reaching a historical high in September, which has suppressed prices [2] - Due to the cold weather, Iranian methanol production facilities began to shut down in November 2025, leading to a significant reduction in methanol imports to China, which is expected to alleviate port inventory pressure [3] - As of January 15, 2026, coastal methanol inventory stands at 1.42 million tons, down approximately 220,000 tons from the peak in mid-November 2025, indicating a marginal improvement in supply-demand dynamics [3] Group 2: Price and Profitability Trends - Domestic methanol production is characterized by high supply and low profitability, with overall operating rates at 77.91% as of January 15, 2026, slightly down from the previous week but up year-on-year [4] - Production profits have significantly decreased, with coal-based methanol in Inner Mongolia showing a loss of 251.60 yuan/ton, a 17.79% decrease month-on-month, and similar declines observed in other regions [4] - The upward movement in methanol prices is constrained by rising raw material costs, particularly during the winter demand peak for coal and natural gas [4] Group 3: Downstream Demand and Market Sentiment - The operating rate of methanol-to-olefins (MTO) facilities has decreased to 80.75%, with several plants undergoing maintenance, indicating pressure on downstream demand for methanol [5] - Traditional downstream sectors such as formaldehyde and acetic acid are performing poorly, with overall operating rates at historically low levels, limiting demand support for methanol as the Spring Festival approaches [6] - The geopolitical situation, particularly tensions between the U.S. and Venezuela, has raised concerns about methanol supply, further contributing to price volatility [3][6]

Report Overview - On January 19, 2026, the closing prices of the pure benzene 2603 contract and the styrene 2602 contract were 5,827 yuan/ton and 7,295 yuan/ton respectively, with daily increases of +3.48% and +1.86% [2] Core Viewpoints - Pure benzene is in a transitional period where the fundamentals may shift, with significant real - world pressure. Although high inventories may limit short - term increases, there will be a quarterly improvement in Q1. There is a possibility of an early market manifestation under the consistent expectation similar to the polyester chain [3] Reasons for the Rise - **Port De - stocking**: As of January 19, 2026, the total commercial inventory of pure benzene at Jiangsu ports was 20.7 tons, a reduction of 2.7 tons from the previous week. From January 12 - 18, there were no arrivals and about 2.7 tons of pick - ups, which was the first de - stocking since November 10 [3] - **Downstream Profit Boost**: Driven by export deals and unexpected maintenance, styrene supply and demand are tight, and the price difference with pure benzene is widening. Two styrene plants are about to resume production, and terminal export growth drives demand [3] - **Potential Tariff Cancellation**: There are discussions about the US canceling the 15% tariff on South Korean pure benzene, which is seen as a potential positive factor [3] - **Catch - up in Aromatic Allocation**: In the chemical industry, aromatics are a multi - allocation sector. After the previous rally of PX - PTA, it entered a digestion and feedback phase. Pure benzene, with a relatively low valuation, has become a multi - allocation choice for funds [3] Market Outlook - From the balance sheet, the supply - demand gap remains positive from January to February but decreases month - on - month. There may be a small amount of de - stocking in March. High inventories may limit short - term increases, but there will be a quarterly improvement in Q1. If the US cancels the tariff on South Korean pure benzene, it will greatly benefit the domestic pure benzene balance sheet and raise its valuation [3]

Market Overview - On January 12, the styrene market in East China saw an overall increase, supported by limited port inventory and a quick recovery in industry profits, leading to stable operations of styrene units [1] - The spot price for styrene was reported at 7140-7220 CNY/ton for January, with a slight increase in the February and March contracts [1] Profitability - As of January 12, the profit for non-integrated styrene units expanded to approximately 634 CNY/ton [1] Supply and Demand - Styrene weekly production reached 355,700 tons as of January 8, with an operating rate of 70.92%, reflecting a slight increase [1] - As of January 12, the total port inventory of styrene in Jiangsu was 100,600 tons, a decrease of 31,700 tons from the previous period [1] - The operating rates for downstream products as of January 8 were 46.72% for EPS (up 3.08%), 58.9% for PS (down 1.5%), and 69.8% for ABS (down 0.1%) [1] Market Outlook - The short-term supply and demand for styrene remain tight, with port inventories continuing to decline and limited circulating goods, indicating strong price support [2] - However, there is significant resistance from downstream sectors due to losses, leading to a decline in EPS operating rates and reduced production focus for ABS and PS, with expectations of inventory accumulation around the Spring Festival [2] - The potential for a rebound in styrene prices is limited due to constrained cost support, and a cautious approach is recommended for short-term trading strategies [2]

Report Summary 1) Report Industry Investment Rating No information provided. 2) Core View of the Report The domestic market has a relatively high valuation. Although the domestic chemical industry has poor profits, the operating rate remains firm, and there is an expectation of a slight increase in civil demand, so there is still short - term support. Attention should also be paid to winter weather and oil price conditions [1]. 3) Summary by Related Content Daily Changes - On Monday, for civil gas, the prices in East China were 4401 (-10), in Shandong 4500 (+0), and in South China 4460 (-10). The price of ether - after carbon four was 4540 (+70). The lowest delivery location was East China, with a basis of 91 (-52) and a 01 - 02 month spread of 71 (-8). As of 21:00, FEI was 528 (+2) and CP was 508 (+2) dollars/ton [1]. Weekly Views - The futures market fluctuated. The basis was 143 (+232), the 01 - 02 month spread was 79 (+3), and the 03 - 04 month spread was -211 (-19). The number of warehouse receipts was 4611 (-200) hands. Civil gas prices rose, and the cheapest delivery product was East China civil gas at 4411 (+88). The external market FEI declined, while CP and MB increased, and the oil - gas ratio decreased. Both domestic and external markets weakened. PG - CP dropped to 100 (-21); PG - FEI dropped to 79 (-7). The US - Asia arbitrage window opened. The arrival premium of propane in East China was 97 (-2), and the FOB premiums of propane in AFEI, the Middle East, and the US were 30 (+18.75), 25 (-13), and 43 dollars (+4) respectively. Freight rates decreased [1]. - PDH spot profits weakened, and the futures market profits declined; the alkylation unit improved; MTBE profits fluctuated. Port inventories decreased (-7%) due to a significant drop in incoming ships (-18%) and a slight increase in demand; refinery inventories increased slightly (+0.86%). The PDH operating rate was 70.22% (+0.4pct), the alkylation operating rate was 37.93% (+1pct), and the MTBE operating rate was 71.58% (+0) [1].