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Demand rise and tight supply lifts the Methanol price in the global market
Demand rise and tight supply lifts the Methanol price in the global market

Demand rise and tight supply lifts the Methanol price in the global market

  • 26-Apr-2022 5:25 PM
  • Journalist: Rene Swann

Despite surging Natural Gas and crude prices in the global market, a contrasting market scenario in different regions kept the Methanol prices oscillating. In China, the price of Methanol remained stable when observed on 22nd April. The negotiated price in Southern Shandong was observed to be hovering around USD 446/ton - USD 448/ton. The coal to Methane unit became stable, and the daily conversion output was moderate. However, this week the price of Methanol rose with minute fluctuation in China’s Petrochemical market. With the week ending on 22nd April, the price of Methanol surged to USD 375/ton CFR Qingdao with a weekly inclination of 1.35%. However, weak cost support and deterred downstream purchases resulted in a price trend. The sluggish Chinese economy forced the Communist Party to set back Beijing’s production cut among the Petrochemical industries, which was amended to reduce climate-changing carbon emissions.

In the US and European Petrochemical markets, the price of Methanol surged to record new heights with increasing Natural Gas and crude prices. Rising Russia-Ukraine tension affected the Petrochemical market in the regional market. The rapid rise in demand was accelerated by low operating production units and surging natural gas market, which enabled the downstream buyers to raise their offers. Narrowing profit and constraints on supply forced the manufacturers to revise the product prices. Domestic feedstock coal consumption surged this month amid disruption in supply, and Energy Information Administration (EIA) had revised their US coal export upward.

According to ChemAnalyst, supply disruption and accelerating demand will increase the prices of Methanol in the European and US markets. Rising tension between Russia and Ukraine will further boost the market sentiments and oscillate the price trend. Methanol consumption from the downstream derivatives market is expected to increase with surging needs from the consumer's end. In China, the Methanol market will more likely remain stable, and surging covid cases will weaken the domestic market's trading environment. Port congestion in East China will increase transportation and logistics costs, affecting market sentiments.

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