The Middle East situation has been rapidly escalating, causing concerns about the disruption of Iran’s exports. On Monday (June 16), the price of Chinese methanol futures soared to 2,464 yuan per ton (about $343) on the Zhengzhou Commodity Exchange, reaching a new high since April. The price remained relatively stable on Tuesday (June 17).
According to Bloomberg, Asaluyeh Port in southern Iran is a critical hub for methanol exports to China, and recent tensions have resulted in a slowdown in loading ships. The China Chemical Industry Research Institute, SCI, has warned that if the conflict escalates and logistics are interrupted, China will face a “significant supply gap”.
Market data from Kpler shows that about 40% of methanol imported by China in 2024 came from Iran, totaling up to 5.2 million tons for the year. Methanol is an essential raw material for China’s plastic industry and a primary feedstock source for coastal Methanol-to-Olefins (MTO) plants.
Moreover, last week, there was a fire incident in another Iranian export facility located approximately 120 kilometers from Asaluyeh Port, exacerbating concerns in the market about supply disruptions.
As the US-Iran nuclear talks have stalled, President Trump warned earlier this month that any country purchasing Iranian oil or petrochemical products may face sanctions without warning. The US has already imposed penalties on several Chinese refineries and energy companies. If methanol is included in the sanctions, it will directly impact China’s supply chain.
According to Ann Sun, a senior analyst at the global chemical information institute ICIS, “Iranian methanol is almost the only efficient source for China’s coastal MTO facilities to stably obtain raw materials.”
Currently, some Iranian methanol is transshipped to China via Oman or the UAE. However, if the US imposes sanctions on transshipment as well, China may need to seek new supply sources, leading to increased industrial costs.
Amid continued clashes with Iran, the sixth round of US-Iran nuclear talks scheduled to take place in Muscat, Oman on June 15 was canceled. The Iranian Foreign Ministry stated that negotiations have no legitimacy as long as attacks from the other side persist, reiterating that lifting sanctions is a prerequisite for restarting talks.
President Trump stated on Tuesday that he is seeking a “real end to the war” between Israel and Iran, rather than just a ceasefire. He did not rule out the possibility of meeting with Iran but emphasized that he is currently not in the mood for negotiations.