Supply tightness props methanol price
Methanol market price is heading toward 90¢/gallon
Tom Stundza -- Purchasing, 10/21/2009 12:43:41 PM
Methanol prices have jumped 29% this month to 80¢/gallon even though demand improvement remains weak in advance of the expected fourth-quarter inventory build by consumers. Some forecasts have methanol at 90¢ next month because of what analysts call "implicit spot price support" from the recent supply disruptions in Venezuela.
Domestic operating rates are at about 53% of capacity because of the demand and pricing slide for the solvent this year. Methanol opened 2009 at $1.25/gallom but has sold under $1 for the following nine months. A report by ICISpricing.com says that "with both buyers and sellers describing the market as thinly balanced, any significant outage would immediately bump prices up in the spot market."
Analysts at TD Securities say there are indications of some inventory building by end users fearful of reduced supply in coming weeks. The sudden tightness in methanol throughout the Americas has been caused by power outages at two Venezuelan methanol plants. The 850, 000 metric ton/year Metor (Methanol de Oriente) plant has been successfully restarted, analysts report, but the Supermethanol plant-representing 790,000 metric tons of annual output-won't be back up for several weeks.
Also, Chinese demand growth for methanol as a gasoline additive and reduced exports from the Middle East into the Americas has resulted in net U.S. imports through August of 3.13 million net tons, almost 20% lower than the same eight-month period last year.
Methanol price rises on short supply
11/04/2009
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