Asian Methanol Market Witness a Steep Rise in Demand With Exhausting Inventories
- 17-Jan-2023 3:26 PM
- Journalist: Bob Duffler
Tanjung Priok, Indonesia- In the Southeast Asian market, the trading fundamentals have risen with enhancement in purchasing activities. The Methanol supply among the enterprises has been limited, resulting in higher bidding for the product among the suppliers. Regional inventories decline, resulting in more aggressive imports from overseas producers. Exports from Saudi Arabia to Southeast Asia increase with rising product demand in the regional market. Buying activity picked up in Indonesia for deliveries to Dumai, Batam, and Gresik for February. An unplanned shutdown of Saudi Arabia-based Ar Razi Saudi Methanol's 1.7 million MT/year unit on January 6 spurred interest for a spot cargo in Southeast Asia. Also, PT. Kaltim Methanol Industri, with a production capacity of 710 KMTPA, undergoes a maintenance turnaround on December 12, 2022, and is expected to resume in mid-January 2023.
In South Korea, Methanol inventory was tight and downstream demand was healthy for acetyls, formaldehyde, and polyoxymethylene.
In the Chinese market, the Methanol prices stabilize with tepid buying activities for the fresh stock. However, the Methanol demand remains firm when compared with the previous weeks. Also, the market trading dynamics will be affected from January 17 to January 29 for the Spring Festival holiday. With the Lunar New Year, several sellers were wary of volatility in the Methanol market and did not want to sell on a fixed price basis. As the Yuan appreciated against the US dollar, Chinese Methanol prices on an import-parity basis have strengthened recently. With the week ending on January 13, the price of Methanol in China stabilizes at USD 382/ton CFR Qingdao.
According to ChemAnalyst, the demand for Methanol will rise in the Asian market with firmer spot prices. Trading in Southeast Asian countries will improve with elevated import prices from Saudi Arabia. The downstream Formaldehyde and Formic Acid market will further improve, and higher product bidding among the traders will further boost the prices. In China, the market trading fundamentals will remain muted during the Chinese New Year and are anticipated to pick up pace towards the end of this month.