Tightening Supplies and Brisk Energy Values Support the Global Methanol prices
- 29-Sep-2022 4:27 PM
- Journalist: Jung Hoon
Hamburg, Germany- In the European market, the price of Methanol surged after showing a downward trend for the past few weeks. Prompted by rising utility and energy costs, the price of Methanol gained a stance with tepid market fundamentals and higher bidding for the new stocks from the USA.
Major Methanol producers OCI Netherlands and Methanex are planning to add the additional capacities driven by strong demand growth and limited existing production units. Demand for Methanol from the downstream derivative market elevated. Prices of(Methyl tert-Butyl Ether) MTBE and Formaldehyde remain on the high end with the utilization of products from the Gasoline and construction sectors, respectively.
In terms of the feedstock coal market, Sanctions imposed in light of the conflict in Ukraine have cut numerous European countries' coal supply from Russia, the mainland's top supplier, driving costs for Natural gas and electricity in Europe to record levels.
Iran's unplanned Methanol plant outages have bolstered its prices in Asia. Exports of Methanol from Iran to other Asian regions tumbled, disrupting supply/demand dynamics and accelerating the prices. In China, Bushehr Petrochemical Co.'s 1.65 million mt/year Methanol plant went offline on Sept. 13, and Kaveh Methanol Co.'s 2.3 million mt/year Methanol plant stalled on Sept. 10, all due to technical issues, which elevated the Methanol prices.
Despite an increase in upstream Natural Gas inventories in the USA, the Methanol market boosts with healthy exports to South Korea and Europe. The USA is turning to plug the shortfall of Methanol in Europe, but the trading is limited due to energy values oscillating and rising domestic demand.
According to ChemAnalyst, the global price of Methanol will accelerate in the forthcoming weeks. With rising consumption of Methanol in Europe, the purchasing activities will increase, and tightening supplies will embolden the significant producers to hike prices. In the Asian market, numerous plant turnaround will support the price dynamics with the rising downstream derivative demand.