jessebrown schreef op 21 september 2020 22:11:
Demand rise, tight supply lifts global methanol prices
Published date: 21 September 2020
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Methanol prices around the world are on an upswing with a demand lift and tightening supply across major regions.
In the US, producer buying combined with weather-related outages pushed spot methanol discussions to the upper 70¢/USG range, and they have steadied there for much of September. This is up from spot prices around the low 60¢/USG range in early August amid logistical constraints caused by Hurricane Laura and preparations for a turnaround at a US Gulf coast production unit brought US methanol prices to a six-month high.
Producers were heard buying on the spot market for delivery in October and November, providing support in the outer months and a shift back to contango from a backwardation. Pricing in August and September saw a backwardation emerge on several outages in the Americas region.
Vancouver-based producer Methanex was heard buying on the spot market ahead of a major turnaround at its unit in Geismar, Louisiana. Methanex did not comment.
US-based chemical producer Celanese said last week that demand in China has recovered to pre-Covid-19 levels as industrial production is recovering from the Covid slump earlier in the year. Chinese industrial activity is a proxy for global economic activity, as the country is by far the world's largest consumer of methanol.
In Asia, prices rose to the highest seen in the past six months as a slew of outages in the Middle East hit supply availability for October. Demand in China has also supported the global market.
Spot prices in China surged last week, with offers from regional producers rising to around $250/t cfr China and buyers raising bids to $242/t, the highest since the week of 6 March. Spot prices had plunged to $151/t in May as downstream demand in China collapsed because of the Covid-19 outbreak.
Across the Atlantic, latest values for September and October delivered methanol were heard in the Northwest Europe market at €212/t fob Rotterdam.
The European methanol market has seen a supply crunch. Methanol supply has fallen in Rotterdam in September, with current inventory levels estimated to be around 60-70pc, down from the oversupply situation seen during the second quarter.
The decrease in supply was due to lower import levels over the summer, as some cargoes were diverted away from Europe to supply higher-priced regions. In addition, domestic northwest European methanol production decreased, with some units offline and others reducing utilization rates, as well as a recent period of unexpected and intermittent production interruptions in countries which export methanol to Europe.
But against this backdrop of supply erosion, the market has also seen a recovery in demand in Europe. Formaldehyde demand has increased, with consumption of wood-based products and consumer goods improving, as the market exited lockdown across some EU countries.
By Steven McGinn, Victoria Bagdjian