Tianfeng Securities: The end of overseas expansion + "anti-involution" The methanol industry's prosperity is expected to continue to rise

According to the Zhitong Finance APP, Tianfeng Securities released a research report stating that over the past five years, global methanol production capacity has grown at a rate of 4.6% per year, exceeding the demand growth rate of 2.7% per year, leading to a relatively surplus state of global methanol. In recent years, with advancements in chemical technology and the enhancement of environmental standards, small-scale, high-energy-consuming, and environmentally challenging small facilities have gradually been eliminated, and this trend is likely to continue in the future. The approval of coal-based routes may be strictly controlled by the state, while the coke oven gas route may be generally limited due to the decline in domestic steel production, which will affect the overall production of methanol from coke oven gas; on the demand side, driven by various emerging fields, methanol demand is expected to maintain long-term stable growth, and the contradiction between methanol supply and demand may continue to amplify in the future. The main viewpoints of Tianfeng Securities are as follows: End of overseas new capacity expansion Over the past five years, global methanol production capacity has grown at a rate of 4.6% per year, exceeding the demand growth rate of 2.7% per year, leading to a relatively surplus state of global methanol; in the coming years, new overseas capacity will mainly be concentrated in Iran. From 2026 to 2028, Iran has plans to put three sets of 1.65 million tons methanol facilities into production, but the instability of Iran's natural gas supply may bring significant uncertainty to project progress. Existing new methanol plants in Iran are intermittently operating due to technical challenges and natural gas restrictions, and the ongoing energy crisis has further worsened the situation, leading to a low growth period for overseas methanol capacity. Domestic "anti-involution," scientific demonstration of new coal chemical projects Approval for incremental projects is becoming stricter: In May 2025, the National Development and Reform Commission proposed optimizing industrial layout, curbing the expansion of backward capacity, accelerating the elimination of backward and inefficient capacity in industries such as refining, and scientifically demonstrating new capacity projects in coal chemical industries. Against this backdrop, several million-ton coal-based methanol projects have been put on "pause" or delayed, and among the new capacities with strong certainty in the future, many are supporting coal-based olefins, which do not contribute to methanol circulation. In the context of steady growth in non-MTO downstream demand, methanol circulation resources may become increasingly tight. Existing facilities have optimization potential: Approximately 8% of the methanol industry's production capacity has been in place for over 20 years, and the industry overall is characterized by many production enterprises, small facilities, and scattered capacity distribution, with 27% of capacity being 300,000 tons or less. In recent years, with advancements in chemical technology and the enhancement of environmental standards, small-scale, high-energy-consuming, and environmentally challenging small facilities have gradually been eliminated, and this trend is likely to continue in the future. In summary, the approval of coal-based routes may be strictly controlled by the state, while the coke oven gas route may be generally limited due to the decline in domestic steel production, which will affect the overall production of methanol from coke oven gas; on the demand side, driven by various emerging fields, methanol demand is expected to maintain long-term stable growth, and the contradiction between methanol supply and demand may continue to amplify. By 2025, the domestic methanol market will have a strong practical foundation: high operating rates, low inventory, and profit recovery. In the future, under the long-term supply-demand contradiction, the prosperity of the methanol industry may continue to rise. Related targets Recommended attention: China Heart-to-Heart Fertilizer (01866), CNOOC Chemical (03983), JINNIU CHEMICAL (600722.SH), Huayi Group (600623.SH) Risk Warning Risk of intensified industry competition, risk of uncertainty in industry policies; tariff risk; risk of significant fluctuations in raw material prices