Asian Methanol Margins Improve, Methanex Anticipates Good Days Ahead
Methanol futures in the Asian markets rose upwards for two months in a row backed by strong demand from Methanol-to-olefin (MTO) sectors as several plants resumed operations and ramped up production after plant outages in Q1FY20. Methanol contract prices have cumulatively rebounded by 21% since August to nearly USD 260/tonne. This was backed by firming crude oil which recuperated from its record lows to around the $40/bbl level in September. In its recently revealed third quarter market outlook, Methanex Corp. stated that margins would further improvise as economic activity recovers at the back of somewhat stable oil prices in the recent weeks. Easing of Chinese port inventories and opening up of the Indian market has further supported the demand outlook leading to higher offtake of the Iranian cargoes. Methanex’s average Methanol price realization has risen by USD 20/ton during the third quarter despite tentative seasonal output cuts and planned maintenance turnarounds. The world’s largest producer and supplier of Methanol is optimistic about its Q3 results amidst COVID-19 related uncertainties.