Methanol prices experienced volatility followed by a sharp surge in the first quarter, primarily driven by geopolitical conflicts in the Middle East during March. Domestic production increased by 6.7% year-on-year, while imports were high initially but declined later, with March imports expected to drop to around 500,000 tonnes due to the conflict. Coastal inventories fell rapidly, and inland inventories peaked before declining. In the second quarter, if the Strait of Hormuz remains blocked, imports will stay low, maintaining a tight supply-demand balance; if the situation eases and the geopolitical premium recedes, prices face the risk of a significant correction.
For the week ending March 18, the operating rate of domestic methanol plants rebounded to 92.8%, reaching a historical high. The current domestic methanol market exhibits a structural characteristic of "sharply reduced imports and full domestic production." The continuous drawdown of port inventories confirms the substantial impact of reduced imports, while the domestic operating rate has hit a record high, indicating almost no room for further supply increases. If the import gap continues to widen, domestic production increases will be insufficient to compensate effectively, potentially enlarging the supply-demand gap.
Under the dual constraints of high import dependency and domestic capacity utilization nearing its limit, the market is shifting from "expectation-led" to "reality-driven," with the realization of the supply gap becoming the core support for prices. A Fitch report suggests that methanol producer margins will expand as supply tightens due to the Iran conflict.
Methanol industry chain companies involved in Hong Kong stocks: - CHINA RISUN GP (01907): Currently operates an annual methanol capacity of 600,000 tonnes, all produced using coke oven gas as feedstock. Its methanol production primarily utilizes coke oven gas, a by-product of its own coking business. This vertically integrated model ensures relatively stable and self-sufficient raw material sources, effectively mitigating risks from external supply chain fluctuations (such as natural gas and coal price volatility). The company maintains full-load stable production annually, and its methanol capacity holds a certain share of China's total coke oven gas-based methanol production. - CIMC ENRIC (03899): Its biomass-based green methanol project in Zhanjiang, Guangdong, commenced operation in December 2025, with an initial annual capacity of 50,000 tonnes. The company's green methanol products have received international certification and successfully completed Hong Kong's first "ship-to-ship" green methanol refueling operation. It is advancing the second phase of the Zhanjiang project. The company has signed a strategic cooperation agreement with Datang Hainan, planning to jointly build a green methanol project with an annual capacity of 100,000 to 200,000 tonnes in Danzhou, Hainan. - Hong Kong and China Gas (00003): Through cooperation with Foran Energy, Hong Kong and China Gas is expanding its green methanol business. The two parties jointly established a 50/50 joint venture, VENEX, in 2025, focusing on green methanol production and operations. Hong Kong and China Gas has injected its green methanol plant in Ordos, Inner Mongolia (Inner Mongolia EGA Coal Chemical Technology Co., Ltd.) into VENEX. The plant already has an annual green methanol capacity of 50,000 tonnes and plans to increase capacity to 300,000 tonnes per year through upgrades. VENEX plans to invest in building green methanol production bases in Inner Mongolia, the Guangdong-Hong Kong-Macao Greater Bay Area, Hainan, and other locations, targeting a total annual capacity of 1 million tonnes. - Goldwind Science & Technology (02208): Its 725,000 tonnes per year green hydrogen-to-green methanol project in Xing'an League received approval in February 2026 and is scheduled to commence construction in May 2026.
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