Methanex and Mitsui O.S.K. Lines Alliance to Boost Overseas Methanol Trading, Global Prices May Plummet
- 12-Nov-2021 5:16 PM
- Journalist: Timothy Greene
Canadian Methanex Corporation, the world’s high ranking methanol producer and supplier, has finalized terms with Japan-based shipping giant, Mitsui O.S.K. Lines (MOL) over Methanex’s Waterfront Shipping subsidiary in which MOL will be acquiring a 40% stake worth USD 145 million while the remaining 60% will stay with Methanex.
Waterfront Shipping, which runs the world’s biggest methanol ocean tanker fleet, forms a crucial constituent of Methanex’s supply chain networks that deliver methanol shipments to the international markets of North America, Latin America, Europe, and the Asia Pacific. MOL’s onboarding is envisioned to impart extended shipping capabilities to Waterfront Shipping by making use of MOL’s more-than-a-century-long global shipping expertise.
Methanol is a colourless, flammable organic liquid produced from steam reforming of fossil fuel feedstocks like natural gas and coal. Besides its usual applications in transport, construction, paints and coatings, cosmetics, and furniture sectors, methanol is gaining popularity as a cost-competitive and low-emission marine fuel. The deal between the two companies has been concluded in light of the positive future outlook towards augmenting the commercialization of methanol as a sustainable marine fuel.
As per ChemAnalyst, the strengthening of the shipping network for methanol arbitrage gives a positive hope amid the ongoing turbulence in the methanol market due to severe coal crunch and escalating natural gas feedstock prices across the globe. Limited supplies due to the idling of Methanex production plant in the USA following landfall by the Ida hurricane has further fuelled the escalating methanol prices in North America and European countries. The expanded shipping network is expected to establish a facile and timely methanol supply to the international markets across Europe and the Asia Pacific regions. The availability of methanol is expected to bring down methanol prices to a fair extent thus easing out the mounting price pressure in the downstream sectors.