Yushen Energy & Chemical will undergo a 35-day shutdown for maintenance starting June 5; supply of Methanol, DMF, and Synthetic Ammonia is tightening.

On June 5, Yushen Energy & Chemical, a holding subsidiary of Xinghua Shares, commenced its scheduled annual shutdown and maintenance work for its integrated coal chemical installation as planned. The overall maintenance period is scheduled for 35 days. With the entire production line suspended, full-scope operations are being conducted, including equipment maintenance, pipeline inspection, catalyst servicing, and system technical modifications and defect rectification. Due to the complete shutdown, the production of the company's main products, methanol, DMF, and synthetic ammonia, has been simultaneously suspended, leading to a significant reduction in phased output. This has directly resulted in a tightening of market commodity supplies from mid-to-late June through early July.

From the perspective of product supply, Yushen Energy & Chemical's supporting integrated capacity includes methanol, DMF, and synthetic ammonia co-production units. Relying on the advantages of Northern Shaanxi coal resources, it is one of the mainstream suppliers in the Northwest region. Apart from local consumption by downstream industries, its products are transported long-term to trade markets in North China, East China, and Southwest China. During the shutdown and maintenance period, the regular external supply of commodities was completely halted, accelerating the consumption of short-term marketable spot inventory. The spot market in June relied on support from previous factory inventories and trader stocks. As inventories are gradually depleted and the unit maintenance continues into early July, the overall supply of spot commodities for methanol, DMF, and synthetic ammonia is showing a contracting trend from June to July.

Detailed Impact by Product:

Methanol: The methanol production line of the co-production unit has completely shut down, reducing the volume of goods for external sales in the Northwest. Some downstream purchasers with rigid demand have turned to surrounding production areas in Inner Mongolia and Ningxia to replenish stocks. The regional circulation pattern of supply has tightened, providing phased support to local methanol spot prices.

DMF: As one of the important DMF production enterprises in China, the effective production capacity in the industry has declined following the shutdown of Yushen Energy & Chemical. DMF factory spot scheduling has tightened, making it more difficult for small and medium-sized procurement clients to secure goods.

Synthetic Ammonia: The external volume of liquid ammonia and industrial synthetic ammonia has plummeted. Downstream sectors such as fertilizers and chemical intermediates are seeking goods on demand, resulting in tight supply in some local regions.

The 35-day maintenance cycle implies that the installation is expected to complete maintenance and resume feeding in steps in early July. After restart, it will still need to undergo heating, commissioning, and gradual load ramp-up stages, making it difficult to quickly resume full output shipments in the short term. Therefore, the market is unlikely to see new supplementary supplies from late June to early July. In the absence of concentrated volume release from other new units to offset this, the support strength from the spot supply side for the three major products will rise, and regional trade quotes are likely to show a firm-to-strong trend influenced by the contraction in supply.