Poker Interview | Peng: calm! Methanol fourth quarter is still all-powerful?

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Lead: Recent methanol market fluctuations, what drives the reason behind?

Interview Guest | general manager of the new lake futures commodity business unit Peng Jun reprint please contact the author of Poker (ID: puoker) Authorization

key point

1. this year methanol futures market more volatile, both affecting cash game at the macro-environment of the reasons behind the push, but the core factor is the spot
the fundamentals of supply and demand push contradictory.

2. Callbacks Recent methanol price is mainly influenced by the macro-level, black tie, led by commodities across the board callback, methanol and other chemical products futures prices fell homeopathy, but the fundamentals of supply and demand
obvious, the supply side is still relatively positive expectations.

3. East China market price of methanol to the price of the most active traders, the greatest impact on futures, high and low port inventory data for the market trading mentality has a very large direct impact.

4. Industry research analysis has a vital significance decide on the fundamentals, the core fundamentals of supply and demand balance sheet, balance sheet data you need support, and accuracy of the data required by the actual research to
confirmed.

5. Is not expected in the fourth quarter, the overall supply of methanol to market changes, the overall amount of excess supply of 100,000 tons / month range.

6. Believes thermal coal prices further highlights the decisive late to the cost of coal to methanol, might become the core element around coal to methanol operation.
Coke oven gas to methanol in the fourth quarter by the most direct environmental impact, natural gas, methanol late you will need to pay close attention to corporate supply stability.

7. Methanol industry supply and demand in the fourth quarter to cut the main supply, smaller variable downstream demand, the overall oversupply situation effectively ease the supply pressure is not, but for the fundamentals, may still
is easy to go up than going down the pattern, of course, the actual situation need to consider the impact of macroeconomic and financial level.

PUOKE Interview Heavy guests

Wang Peng, Master of Economics, Renmin University of China, currently general manager of the new Lake futures commodity business unit, responsible for large industrial customers
and maintenance work, and to design and develop programs and services related hedging futures knowledge training for many large enterprises.
To fundamental research, mainly in the research aspects of the industry chain has made huge gains for the industry chain has run deep understanding.
In the “Futures Daily” and “Shanghai Securities News” and other public media published several research reports.

full interview:

➤ Poker Finance: Recent methanol market fluctuations, promoting what is the reason behind?

Chi Peng coffee: this year methanol futures market more volatile, driven by the game affect the funding of the reasons behind both the macro environment, while the core factor is
spot the fundamentals of supply and demand push contradictory.
If re-set the first three quarters of this year methanol market trend can be seen: the Chinese New Year before the holiday early due to lower stocking and restocking is expected by the international methanol prices, and larger hikes by the end of 16 market supply and demand gap, pre-holiday market relative price
a strong rebound after a slight pullback to the high point of the year.

in the second quarter, the domestic environmental monitoring began, started on methanol downstream are affected to some extent, although in April and May there methanol plant of traditional practices affecting the maintenance part of the market supply, but the emerging downstream of MTO started stocking
expectations of market demand is not implemented, partly MTO enterprise of raw materials inventories high, pause or slowdown in external procurement plan, leading to market expectations of favorable factors is not fulfilled, in addition to start the macro level to start the financial sector deleveraging in April, resulting in market liquidity exists negative expectations
.

In the methanol market fundamentals and macro-bad atmosphere influence each other, the market trend is clearly downward, forward contracts and futures presents premium spot pattern, of the current market, the main contradiction is expected to sell bought reality, although the spot market
given the fact that there is a reduced supply of maintenance in the spring, but for the far month futures contract still did not play a supporting role.

In late June, beginning of July, commodity market atmosphere warming by the cold, macro-level market tightening is expected to ease the funding level, after tensions eased, commodity market in the excited mood, black
Department-led broad based commodity, in this atmosphere of influence, methanol futures prices began to gradually bottoming shock rise.
But then methanol fundamentals did not show significant contradiction, the opposite end of the spring maintenance, recovery is expected to supply the market with the expected release of new capacity in Shandong Province coexist, leading to industrial customers on the spot market in the late obviously not good, most traders are keen
in arbitrage operations to lock in profits.

the beginning of August, Shandong new capacity to monitor the impact of environmental protection has not been put in, plus more in the Middle East and Iran, Saudi Arabia and Egypt methanol plant maintenance, as well as the United States part of the device being discontinued hurricane, expected imports
reduction, originally expected to continue to increase market supply shattered, market sentiment reversed.
Fundamentals coupled with macro-level funding boost, break methanol market trend is clearly upward in August, prices rose sharply.

Recent methanol market position of greater pressure in 3000, the current supply and demand fundamentals are not obvious, but there are still some National Day holiday is expected replenishment, cash port inventories rose more obvious, obvious signs of shrinking imports,
supply levels remain relatively positive expectations; and downstream methanol to methanol to olefins based industrial profits was acceptable, pre downstream end-product prices, the MTO corporate profitability significantly improved operating rates at historically high levels.
Recent methanol price correction is mainly influenced by the macro-level, black tie, led by commodities across the board callback, methanol and other chemical products futures prices fell homeopathy.

Overall, this year the domestic supply and demand pattern changes in the larger area, the traditional supply and demand pattern in the Northwest region outside the region torsion methanol output, along with a lot of coal to olefins production in the region, the local oversupply
pressures eased significantly, resulting in outside the Northwest lose a significant reduction in the amount of methanol, and the supply of Shandong in East China port area of ​​influence significantly decreased, especially in the second and third quarters, northwest turn local coal methanol plant maintenance, external input amount of methanol numbered.

➤ Poker Finance: financial and macro-level factors on the trend of methanol and produce what kind of impact?

Chi Peng coffee: macroeconomic and financial level, greater impact on methanol futures as futures prices and spot market prices mainly reflected the long-term market expectations, reflection
, far month futures contract market participation is a central contradiction between supply and demand to predict the future.
In contrast, efforts to market a greater impact far month contract for future economic expectations as well as funding levels judged to economic trends.
For example, due to the recent poor macroeconomic data, July and August industrial output showed a significant increase in downward pressure on the economy, the recent pullback major commodity therefore.

In addition, as during the 2015 stock market crash, methanol futures prices also with the volatility of the stock market ups and downs and frequent stop version, but does not appear obvious contradiction between supply and demand fundamentals.
Another example is the first half of this year, long-term methanol futures premium spot market prices, indicating market participants about the future economy is more pessimistic.

➤ Poker Finance: Port stocks of imported consumption patterns and what kind of change?

Chi Peng coffee: market price of methanol to the price of the most active traders in East China, the greatest impact on futures, high and low port inventory data for market trading mentality
very large direct impact, which relate to the specific impact on the market price of the inventory cycle.
If the port inventory is relatively high, but market purchases lukewarm enthusiasm, then take the initiative to stock traders likely, methanol prices to weaken in order to stimulate the downstream market demand until the balance again.
And if the stock market continued to remain low, the prices are up difficult or easy situation.
2,3 quarter growth stock in east China is not obvious, but last year there are still 15-20% reduction, so the spot price movements in East China by the impact of disk futures fluctuate, traders negotiate prices basically reflect market conditions, there is no price adjustment initiative
motivation.

In recent years, with the coming on stream in east coastal areas MTO device to significantly enhance the demand for methanol, methanol become the core factor supporting the market price.
As the MTO coast are purchased methanol production requires a lot of (East China initially estimated annual amount needed 7-800 ten thousand tons), so in order to ensure normal production, MTO signed a large number of foreign companies in order to protect the stability of the supply of long, usually accounts
50-60% of the total needs of the enterprise.
But in recent years has not been a substantial increase in overseas production capacity, domestic demand for imports MTO methanol, methanol accounts for an increasing share of total imports high, leading to significantly reduce the amount of imports of methanol free flow of trade in the market, such as under normal circumstances East
monthly imports of methanol at between 60-70 million tons, of which about 400,000 tons is the amount directly or indirectly from the MTO enterprise procurement of raw materials inventory.

So, although in recent years a substantial increase in domestic imports of methanol, but the volume flow freely trade the market is in the reduction of the situation, and later made in China down by the Shandong southwest along the river, will make it up
East China market, trade sources to reduce the pattern.

➤ Poker Finance: What is the significance of industrial research on the fundamentals of the market judged?

Chi Peng coffee: industry research on fundamental analysis has a crucial significance of the decision, the core fundamentals of supply and demand balance sheet, balance sheet needs
data support, and accuracy of the data needs to be confirmed by the actual research.
At the same time, due to the ongoing industry research, we can better understand the structural contradictions of the local market, at the same time, some of the visual data research, fundamental analysis can better help.

to August of this year’s survey, for example, in August on our downstream methanol industry Lunan customers conducted an investigation and found that the market consensus is that the original environmental monitoring factors that affect the local formaldehyde and downstream plate
business, but the reality is that the local methanol production enterprises also caused no small impact, including the expected new methanol plant sets production schedule could not be monitored also affect the environment.
Therefore, through research, we promptly corrected the original supply is expected, but these are not the only research data can be mastered.

➤ Poker Finance: Can you predict for us to talk about aspects of the methanol industry supply and demand in the fourth quarter?

Chi Peng coffee: methanol supply and demand situation in the fourth quarter of view, based on the information currently available, the overall supply situation is expected in the fourth quarter of methanol market changed little,
according to our statistics, the amount in excess of the overall supply of 10 tons / month range.
Among them, the domestic aspects of the new capacity is expected to put into operation in the fourth quarter is more specific, Shandong Huaneng Power 1 million tons, the new energy Phoenix 200,000 tons, while the pre-production of 600,000 tons is expected to run out of water will be smooth, and the remaining few
sets new device on the market before the end of the supply is limited; now in terms of new foreign-neutral term, Iran and the United States to be the beginning of 18 basic device can be put into operation and market a real impact.

device operation, the four-quarter coal methanol plant is not expected to appear is a big variable, but the latter thermal coal price will further highlight the decisive cost of the coal-to-methanol, may become the core of running around coal methanol
factor.

natural gas, methanol gas price cut by the “red envelope”, this year’s cost advantages are obvious, but the potential risks of winter gas for civilian industrial gas reductions, the government will be adjusted according to the supply situation for industrial use
gas, natural gas, methanol production has led to variables.
While in previous years the winter, reducing gas head unit also corroborated run short supply issue, taking into account environmental factors cause this problem from coal to gas for heating large number of residents of the northern region, so the latter need to pay close attention to corporate supply stability.

coke oven gas to methanol in the fourth quarter by the most direct environmental impact, according to “2017 air pollution control program of work in Beijing, Tianjin and regional weekly” indicates published, the National coking plant began to extend half the coking time
the impact on production of coke oven gas to methanol is large, according to the 2016 situation, when reducing the supply of about 100,000 tons / month of methanol in North China.

The presence of variable downstream demand in the fourth quarter is not the traditional limited impact on the downstream market, mainly operating situation MTO device, currently limited practical impact of the new MTO devices on the market in the fourth quarter, production is expected to
end.
Currently MTO whole industry chain profits more impressive, willingness to take the initiative to down load MTO companies even shut down for maintenance is not strong, Changzhou Ford No restart the program, we now need to look at MTO is still relatively stable.

In summary, the fourth quarter of methanol industry supply and demand in order to reduce the supply of mainly smaller variable downstream demand, the overall oversupply situation effectively ease the supply pressure is not, but for the fundamentals
, it may still be up difficult or easy pattern, of course, the actual situation need to consider the impact of macroeconomic and financial level.

Because of the time, above, is to communicate with this small series Peng total content.
Have to say, Wang Peng from the total for the first three quarters of this year the market recovery disk, you can see the fundamentals, macroeconomic and financial influence in the face of market produce, where the fundamentals of supply and demand spot is the core factor driving the market
.

However, the fundamentals of the importance of research to determine the market can be described as is well known, why the differences over trade is so big?
Industry research on fundamental analysis has a crucial significance of the decision, but you need to know how to generate research questions to?
“Industry” How in-depth understanding?
What should be concerned about?
Upstream and downstream industry chain of distribution, structure, costs, profits, and so on demand, how to proceed with the analysis?
How analytical framework established?

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