[pom weekly review] facility fluctuations intertwined as pessimism spreads, market plunges sharply

1. Market Focus This Week

1. Supply-side plant changes were mixed: the POM unit at Yankuang Luhua has been gradually restarting, while the unit at Xinjiang Guoye has entered a shutdown for maintenance. The increase and decrease in industry supply have offset each other.
2. Manufacturers’ price adjustments continue to weaken, with many producers lowering their ex-factory quotations, and support for spot prices continues to loosen.
3. The market's bearish sentiment continues to escalate, and industry players have a pessimistic outlook for the future, making discount sales a mainstream operation.

2. This Week’s Market Analysis

III. Analysis of Market Influencing Factors

1. Spot prices have fallen sharply.This week, the domestic POM market weakened across the board, with mainstream grades in East China falling by RMB 900/ton week on week, and South China also declining sharply in sync, as the market center of gravity continued to move downward.
2. Industry operating rates declined month-on-month.This week, the domestic POM industry’s capacity utilization rate was 79.37%, down 3.50 percentage points from last week. The output reduction caused by Xinjiang Guoye’s maintenance exceeded the production increase from Yankuang Luhua’s restart, resulting in a slight overall supply contraction, but weak demand completely offset the support from tighter supply.
3. The industry’s profitability continues to shrink.This week, the average gross profit of domestic POM was only 608 yuan/ton, down 137 yuan/ton from last week. Sharp product price cuts compressed companies’ profit margins, weakening manufacturers’ confidence in holding prices firm.

4. Market Forecast for Next Week

1. Supply sideYankuang Luhua’s units have completed maintenance and are gradually resuming operations. Overall industry supply is steadily recovering, putting renewed pressure on the supply side and making it difficult to support spot prices.
2. Demand sideThe market is gradually entering the traditional off-season for demand, with downstream product manufacturers seeing continued order contraction, end-users showing weak restocking interest, and rigid procurement volumes shrinking further.
3. Cost sideUpstream methanol raw material is expected to weaken, and the support from production costs continues to decline, further dragging down spot POM prices.
4. Macroeconomic PerspectiveThe U.S.-Iran negotiations have made significant progress, and the U.S. has temporarily lifted its maritime blockade on Iran. Iranian crude oil exports are expected to resume, and geopolitical tensions have eased considerably. The previous commodity rally driven by geopolitical factors has faded, and market trends will henceforth be mainly driven by the industry’s own supply and demand fundamentals.

Key focus

1. Supply side: The Yancoal Luhua unit is operating at full capacity, while Xinjiang Guoye is undergoing maintenance. Track overall industry operating rates and inventory changes.
2. Demand side: downstream operating performance during the off-season, actual terminal transactions, and willingness to restock.
3. Cost side: the impact of methanol spot price fluctuations on POM production costs;
4. Macroeconomic aspect: Changes in international oil prices and market sentiment towards supply and demand fundamentals.