CHINA'S H1 METHANOL MARKET: WEAK DEMAND, FOREIGN SUPPLY GLUT

Due to the ongoing global financial crisis, demand in both the overseas and domestic methanol markets has decreased sharply. Additionally, both an oversupply in China’s market and cheap foreign ethanol has kept the market sluggish. Some people are urging that supportive measures be carried out to help methanol companies overcome their current operational problems. In the first half of the year, the main feature of the methanol market was that downstream company demands were weak while capacity utilization rates remained low. For example, the capacity utilization rate of formaldehyde and dimethyl were only 50% and 15%, respectively. Overall, prices of methanol products were low in spite of a slight rise after the Spring Festival. Average prices fluctuated between RMB1,850 to 2,050 per ton. Downstream buyers were simply making inquiries and watching the market. Only a few actually ended up reaching any deals. (July 15, 2009)