As Coronavirus Cases Rise in Iran, Methanol Importers Likely to Face Supply Constraints
China is on the verge of Methanol crisis owing to the unexpected rise in coronavirus cases in its major supplier country, Iran. The latter is battling with the unprecedented novel coronavirus infection and is trying to contain the spread of the epidemic as much as possible. Around 3.5 million tonnes of the total Chinese Methanol import volumes in 2019 (which stood at 11 million tonnes) was imported from Iran. At present, Iran is running just behind China as the number of death tolls touches 60 plus, with 1500 confirmed cases of infection. However, the current scenario shows that Iran is in the process of recovering its methanol production and in the meantime, the supply of methanol to China is unaffected and it is expected that the volumetric export will improve in the month of March . Methanol production in Iran typically slumps during the winter season, but as the weather gets warmer, an ease in the production of feedstock i.e. Natural gas can be observed. It is being considered that in the month of March, more shipments will be diverted towards China instead of India from Iran because the Indian Government is being cautious towards imports from Iran after detention of three vessels carrying Iranian Petrochemicals by Indian Customs Department. Since 80 percent of the methanol requirement in India is fulfilled by Iran, lesser imports have given way to other Middle Eastern suppliers to direct their supplies to the Indian market where Methanol prices are soaring. Not just India, the fear of the spread of the stubborn novel Coronavirus has strongly affected the global demand and supply chain.