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Rising Inventories Cool Down Methanol Prices Globally

Rising Inventories Cool Down Methanol Prices Globally

Rising Inventories Cool Down Methanol Prices Globally

  • 10-Aug-2022 4:50 PM
  • Journalist: Henry Locke

Hamburg, Germany- This week, the cost of Methanol in Germany adjusted lower on the back of constrained contract prices for Europe. Despite higher energy and Naphtha values, Methanol prices slipped due to the surging production rate among the manufacturing units and a gradual increase in inventories among the ports.

Methanol contracts are primarily traded quarterly, but market participants now negotiate monthly with demand-supply disruption.

The global supplier and distributor of Methanol, Methanex, had rolled over the contract prices for Europe. Exports from the Netherlands and Belgium to Germany increased with healthy market fundamentals in the European region. In Germany, the cost of Methanol slipped to USD 518/ton FD Hamburg, ending on 5th August.

Trading activities India remains lulled with low buying sentiment and scaled-down spot costs. A shortage of tank space supported trades early in the month, and suppliers were under pressure to clear existing stock and a path for incoming supply.

However, sales have picked up as few Iranian Methanol plants experienced an unplanned outage, aided by strengthening coal prices. Downstream Formaldehyde producers maintained a lower run rate due to seasonally slow demand from plywood and laminate sectors. Methanol cargo from Venezuela and Russia is expected to arrive in India in the second week of August, further dropping the price.

According to ChemAnalyst, the price of Methanol in the global market will slip in the forthcoming weeks with oscillations in the trading market from the downstream industries. The slight stabilization in the market is expected to help the enterprises utilize the existing inventories among the producers. Declining production costs from the downstream derivative sector will affect the Methanol market, further lessening costs. It is likewise expected that its trading markets to Asian and European nations from major production units will surge with an expansion in its utilization of MTBE and Formaldehyde.

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