China Methanol Prices Spike Amid Iran Supply and Energy Costs
China's methanol market has seen a sharp price surge since March, with methanol trading at 2,832 yuan per ton as of March 13, marking a 28.75% increase from the start of the month. The rally has also boosted coal chemical sector-listed companies.
Iran, the world's second-largest methanol exporter and China's top import source (accounting for roughly 60% of imports), is facing widespread production halts and delayed restarts due to ongoing conflicts. Shipping through the Strait of Hormuz has become increasingly risky, causing delays, higher rerouting costs, and rising war insurance fees. As a result, China's expected methanol imports for March and April face significant uncertainty.
On the cost side, energy prices have climbed sharply. As of March 13, U.S. WTI crude oil April futures closed at $98.71 per barrel, while Brent crude May futures settled at $103.14 per barrel. Natural gas prices also rose, and with gas accounting for over 60% of methanol production costs, the global methanol cost base has been directly pushed higher.
On the demand side, post-Lunar New Year restarts have accelerated downstream production. Key consumers such as formaldehyde, dimethyl ether (DME), and MTBE plants have ramped up operations, with formaldehyde seeing a particularly strong rebound, driving the recovery in traditional demand. Acetic acid and DMF sectors have maintained steady consumption, providing continuous support for methanol demand. Coupled with expected supply tightening from Middle East geopolitical tensions, downstream factories and traders have increased restocking, leading to active purchasing and a three-week consecutive decline in port inventories across East and South China, accelerating inventory drawdown.
Market analysts note that with Iranian imports still constrained, arrivals in March and April are likely to remain low. Supported by strong post-holiday demand restocking and elevated crude oil and natural gas costs, China's methanol market is expected to continue a strong, upward trend in the near term.