Chart of the day: Methanol energy future
The Zhengzhou Commodity Exchange trades methanol futures contracts. Sometimes known as methyl alcohol, the chemical is like ethanol but unfit for human consumption. Produced from carbon monoxide, carbon dioxide and hydrogen through a catalytic process, it is used in the manufacture of other chemicals and to power a few special motor vehicles. What caught our attention was that the December 2017 contract settled at a record high of 3,155 yuan (US$477) per tonne on Wednesday while the January 2018 one touched 3,206 yuan. Since the contracts are not as overbought on the RSI as this time last year, with strong bullish momentum and rising open interest, we feel they could power ahead in thin year-end market conditions. The next measured target from last year’s inverse head-and-shoulders pattern is 3,540 yuan.
Nicole Elliott is a technical analyst