Tags set to weaken
By Staff -- Purchasing, 2/12/1998
After rising sharply through most of 1997, domestic methanol prices are stabilizing and will decline slightly in the second quarter.According to data from Purchasing's monthly survey of chemical buyers, U.S. bulk contracts for synthetic methanol will remain at an average of 74cents/gal in the first quarter, then drop back to 72cents/gal in the second quarter. Spot tags also will stay at 74cents/gal in the first quarter. In the second quarter, spot prices will fall back to 71cents/gal.
This weakening will occur despite market rumors of a possible price increase for the first quarter. "There has been word that prices were going to go up, but I don't think they will," says Glenn Cox, purchasing agent for Thatcher Chemical Co., Salt Lake City, Utah. "Pricing will be fairly stable and then start to go down with demand in the second quarter." Consumption will slow as the oxygenated-gasoline season ends.
Strong demand from the healthy economy kept methanol prices rising in 1997. The average U.S. bulk contract climbed from a low of 53cents/gal in the fourth quarter of 1996 to 74cents/gal in the fourth quarter of 1997. Spot market prices rose from a low of 58cents/gal in the first quarter of 1997 to a high of 74cents/gal in the fourth quarter.
In other market news, The Pace Consultants, Houston, Tex., reports that methanol supplies are being cut back this quarter, but higher import levels will offset the reduction in production. Availability is down because of several scheduled plant turnarounds. Pace also says Hoechst Celanese will restart their explosion-damaged methanol plant in late February.
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