Ample Supply and Weak Demand Oscillate the Methanol Market In Asia
- 10-Jun-2022 4:19 PM
- Journalist: Jung Hoon
Mumbai, India- Due to weak market fundamentals and muted demand, the price of Methanol in the Asian market remained lower. ChemAnalyst had discussed the market sentiments with our trusted trader, noting that ample inventories amid weak interest from downstream derivative players had resulted in such a trend.
In China, demand from the downstream Acetic acid and solvents sectors, which make up most of the methanol utilization, has seen a lull on the back of expanded lockdowns in key provincial economies.
Labor supply issues, a lack of orders for finished merchandise, and transportation challenges in nations like Singapore are impeding downstream production. This is prompting the cancellation of orders for Methanol buys from domestic distributors.
When we throw the light on the Methanol trading environment of Southeast Asia, the pattern was seen to be bearish as certain merchants and wholesalers were heard to have two months of stock in tanks. Trade sources said the exports of Petrochemical products from Southeast Asia to Europe appeared to have eased back. With existing stock yet to be cleared, downstream purchasers attempted to delay the lifting of term cargoes.
Talking about the commodity futures, the contract prices of Methanol for June and July shipments eased with muted fundamentals. The South Korean market looked weaker in July after a US-origin cargo was offered with a revision in the price trend for their cargoes.
The CFR India costs surveyed down with adequate imports from Iran and Saudi Arabia, which impacted the value pattern of Methanol. "The Indian market of Methanol is in a little bit of frenzy at the moment with decreasing Ex-tanks costs at the ports," affirmed by the trusted domestic trader.
According to ChemAnalyst, the price of Methanol in the Asian market is expected to slip further with weak market fundamentals from the downstream derivative market. Feeble imports due to oversupplies and deteriorating demand among the manufacturing units resulted in such a price trend.