US methanol prices declined 4.9% in the week ending to December 26 as year-end destocking, weak spot demand, and producer-led inventory liquidation kept market sentiment decisively bearish, outweighing firm natural gas costs.
Prices of methanol in the USA went deeper into decline during the week ending 26th Dec 2025, falling by some 4.9% on a week-by-week comparison, with weak purchasing and aggressive year-end inventory reductions game-changing the market. This marked a weak conclusion to Dec 2025, with spot-level discussions and a complete lack of new purchasing indications being witnessed in both the domestic and international markets.
Buying activity remained sluggish throughout the week as downstream players remained sparse in the methanol spot market. This was due to the fact that most of the purchasing activity had already taken place earlier in the quarter, with buyers not pressing to add to their inventory levels as the year came to a close. This was also impacted by corporate sector plans to minimize inventory levels.
On the cost side, natural gas prices, which are used as methanol feedstock, held firm due to winter demand. However, this firmness did not result in increased methanol production costs, as producers focused more on reducing inventories than supporting the margin. It was observed that cost factors were pushed to the back seat, as sellers were ready to offer price discounts to increase the flow of goods before the start of the new calendar.
The supply-side force strengthened as US methanol producers were actively destocking their product. The accumulation of elevated inventories within the quarter, along with softer-than-expected demand, convinced producers to be more aggressive on pricing. It was indicated that a number of sellers were offering deep discounts in order to guarantee the disposition of their material before the end of the year, pushing the speed of the price to fall for methanol.
Dynamics in the export market brought little respite, however. Though US methanol suppliers continued to look at export sales, especially in Europe, there was reportedly limited liquidity in Rotterdam, and this dampened the scope for arbitrage. Though the US-origin prices were quite attractive, the European procurers were essentially not present in the market, being adequately served in their own region, so export nominations had little impact in drawing down the US surpluses.
There has not been any disruption in the logistics and production environment. There has not been any disruption reported in the US methanol production facilities or the ports.
Looking ahead, market players forecast that the prices of methanol are set to remain under strain in the initial weeks of the coming year because, despite the holiday effects wearing off, the recovery of the downstream demand would be slow. Though an increase in gas prices could provide a theoretical floor, the prices would be determined by the pace of downstream demand revival.
