The central bank lowered the prospective methanol downgrade

Market Review: On June 10, the main methanol contract ME1409 opened at 2545, reached a high of 2552, and fell to a low of 2531 before closing at 2544. Compared to the previous day’s settlement price, it rose by 0.24%. Trading volume increased by 122 lots to 41,200 contracts, while open interest rose by 842 lots to 50,600 contracts. The market showed moderate activity with mixed sentiment.

Fundamental Analysis: Internationally, on June 9, the FOB Rotterdam methanol price closed at 368.53–369.89 USD/ton, down 1.47 USD/ton from the previous day. Meanwhile, the FOB Gulf Coast U.S. methanol price ended at 365.3–366.97 USD/ton, up 1.66 USD/ton. Prices in Europe and the U.S. remained relatively stable compared to the past two days. Additionally, Brunei's (BMC) 850,000-ton/year methanol plant at Sungai Ridge Industrial Park resumed operations after a 2-3 day shutdown, signaling a potential supply increase.

Macro-Level News: On June 9, the central bank officially announced that starting June 16, 2014, it would lower the deposit reserve requirement for commercial banks meeting certain prudential criteria and serving a specific percentage of “three rural” and small-to-micro enterprises. The rate was reduced by 0.5%. This targeted cut aims to guide financial institutions toward optimizing credit structures and supporting both economic growth and structural adjustment. Previously, monetary policy had shifted from "three tight" to "three loose," suggesting a possible improvement in the economy, although the third quarter is expected to remain weak with only modest growth.

Domestic Spot Market: On June 10, methanol prices in eastern and southwestern regions were temporarily stable. In Taicang, domestic and imported mainstream prices stood at 2530–2540 CNY/ton, while Jiangyin and Changzhou saw prices between 2540–2550 CNY/ton. In Central China, Northwest, and Northeast, prices declined steadily, with weaker trading volumes and more pessimistic outlooks from manufacturers. For example, Henan Xinxiang’s main factory held steady at 2280–2300 CNY/ton, while Inner Mongolia’s main factory set its price at 2050–2150 CNY/ton, with some factories dropping as low as 2120 CNY/ton. In South and North China, prices fell moderately, with Guangdong traders offering 2520–2550 CNY/ton, and Shanxi Linfen’s cash exchange price at 2100–2120 CNY/ton. Jincheng and Yuncheng areas accepted ex-factory prices around 2230–2250 CNY/ton.

Installation Updates: Mengda’s 600,000-ton facility will undergo inspection starting June 5, while Boyuan’s facilities will be inspected, and Xineng’s 600,000-ton unit is planned for a one-month shutdown starting in early July. Jinchengtai’s 300,000-ton unit will also be offline for a month from late June. Gansu Huating’s 600,000-ton facility is expected to be repaired over the next 15 days, while Bluestar’s restart date remains uncertain.

Operational Recommendations: Methanol opened higher on June 10 but quickly dropped after gaining 20 points, hitting a new low. A slight rebound occurred in the afternoon, but the lack of momentum led to a weak close. From the technical charts, methanol has continued to hit new lows, making it difficult to find a bottom. The consolidation range adjusted from 2550–2580 to 2530–2570, with significant pressure near the 5-day moving average. Despite the central bank’s targeted rate cut and the Zhengzhou Institute’s adjustments to warehouse premiums and discounts, the macro outlook shows some positive signs. However, today’s sharp decline suggests that the overall methanol market remains weak, with persistent downward pressure and a short-term bearish trend unlikely to reverse soon. Investors are advised to stay out of the market for now. Active traders may consider holding small short positions around 2560, with a stop-loss at 2580, focusing on day trading. Monitoring the 2550 level could provide key support for future moves.