Core Viewpoint - Since the end of July, domestic methanol futures prices have been continuously declining, with the 2601 contract dropping below 2000 yuan/ton, marking the lowest level since October 2020. The decline is primarily due to increased imports and high port inventories, which are expected to persist into the first quarter of next year [1][5]. Group 1: Domestic Supply and Inventory - Domestic operating rates remain high, with a current operating rate of 76.5% as of November 14, 2023. The coal-based methanol operating rate is at 82.5%, while natural gas-based and coke oven gas-based rates are at 50.6% and 59.4%, respectively. There are few domestic maintenance activities, but some natural gas-based facilities may undergo maintenance starting late November [2]. - Port inventories have surged to over 1.6 million tons, the highest level in recent years, driven by continuous imports since June. The expected import volumes for November and December suggest that inventory reduction is unlikely until at least 2025 [2][3]. Group 2: Profit Margins - Upstream profits have been significantly compressed due to rising coal prices since September, which have increased production costs for coal-based methanol. Despite this, methanol prices have fallen, leading to some regions experiencing profits dropping below breakeven levels [4]. - Conversely, downstream profits have begun to recover, particularly in the olefins sector, where profits have rebounded to their highest levels of the year following the decline in methanol prices. Traditional downstream profits are also improving, although they are expected to remain at historically low levels in 2024 and 2025 [4]. Group 3: Future Outlook - The recent acceleration in methanol price declines is attributed to increased imports and sustained high port inventories, which are expected to limit price recovery. If Iranian methanol facilities begin to shut down as planned at the end of November, import pressures may ease, but high inventories will continue to suppress prices into 2025 [5][6].

Core Viewpoint - The methanol market is experiencing differentiated changes in supply and demand, with port inventories accumulating and domestic production gradually recovering [1] Supply Side - Social inventory at ports continues to accumulate, exerting pressure on prices [1] - Domestic methanol enterprises are gradually restarting their production facilities, leading to a steady recovery in supply capacity [1] Demand Side - There are positive signs in demand, with an expected increase in external procurement of olefins, providing some support to the market [1] - However, after a previous price increase, market transactions show signs of fatigue, and buyers' willingness to purchase has decreased, leading to price fluctuations at high levels [1] Market Dynamics - Future attention should be paid to the actual procurement strength of olefins and the pace of inventory reduction, as these factors will influence market sentiment [1] - The interconnection between domestic and port markets is crucial, as inventory transfers and price transmission will affect regional market performance [1] Macro Factors - The impact of macroeconomic logic on forward contracts should not be overlooked, as macro factors may influence methanol prices through market sentiment [1] - There is a cautionary note regarding the risk of further price pressure under conditions of supply-demand looseness [1]