Asian Methanol Prices are Fluctuating Amid the Disruption in the Supply/Demand Equilibrium
- 24-Apr-2023 3:40 PM
- Journalist: Bob Duffler
Shanghai, China- Methanol prices in Asia end this week on a mixed note where market fundamentals improved in China, but lackluster demand persists in the Southeast Asian market.
In China, cost support from the coal market amid gradual product consumption and rising demand from the downstream derivative sector provides a boost to the Methanol market. With the week ending on 21st April, the Methanol price in China surged to USD 365/ton CFR Qingdao compared with the previous week. However, the prices start to lose momentum towards the end of the week due to a gradual decline in demand and anticipation of importing cargoes from the Middle Eastern region towards the end of this month.
Natural Gas-based Methanol plant has postponed the restart of their manufacturing units due to Natural Gas allocation in China. Berun Group and Qinghao Zhonghao, which have a production capacity of 1 million KTPA and 600KTPA, respectively, have delayed their Methanol plant resumption till the end of April.
In the Southeast Asian market, the Methanol prices showcase a stable price trend this week due to no firmer offers and bids from the USA and Middle Eastern traders. Unexpected plant outage in the region and tepid market demand capped the prices to decline further. However, downstream enterprises, namely, Formalin, plywood, and textile industries struggled to rebound, which limited the requirement for Methanol. Ramadan season also hampered the purchasing activities as there were few buyers who showed keen interest in bulk purchases.
A deterred demand for the new stock will further lower Methanol prices in the Asian market, according to ChemAnalyst. Deteriorating spot trading activities and expectations for further softening in downstream derivative markets will also decrease Methanol contract prices. Exports from the Middle East and the USA are anticipated to slump, and major enterprises will cut their production rate to avoid further stockpiles.
