Quarterly Update on Global Methanol Market
For the Quarter Ending June 2021
North America’s Methanol pricing traced upward trajectory during this quarter, backed by firm offtakes from the downstream segments in the midst of supply shortage. Producers reported sufficient enquiries from the downstream Acetic Acid, MTBE, and Formaldehyde manufacturers in the meanwhile. Average price of Methanol rose from USD 405/MT to USD 488/MT during this quarter in the USA. In addition, Methanol demand as an alternative fuel was also boosted in the global market with a key producer announcing expansion plans sensing the sharp uptick in its demand as a fuel.
The Asian Methanol market reported firm sentiment during this quarter, backed by stable offtakes from the downstream sectors amid tight supply activities. In China, prices kept fluctuating throughout the quarter, as the demand and supply fundamentals remained unstable for a larger part of Q2. The demand from the MTBE sector remained bullish throughout the quarter, while other sectors like Formaldehyde and Acetic Acid kept stable offtakes. While in India, prices kept rising due to shortage and halted imports activities in the country, under the second wave of pandemic. Indian Methanol demand remained low initially in April and May from the downstream sector, which improved during the month of June. Thus, the price of Methanol stood rangebound between USD 412/MT and USD 440/MT in India during June 2021.
The European Methanol demand remained high in Q2 2021, backed by firm demand from the downstream sectors amid tight import supply. World’s first Methanol barge bunkering was conducted at the Rotterdam port during May to observe the feasibility of barge-to-ship supply of Methanol in the world and the outcome was highly in favour of the industry. Downstream demand from derivatives such as MTBE and Acetic Acid remained firm, while the supply activity remained tight. Expensive cargoes also exacerbated the firm pricing across Europe during this quarter. Supply crunch was noted on account of disruptions heard at some major production plants.
For the Quarter Ending March 2021
North America faced severe shortage of Methanol along with several other chemicals, due to winter storm across the US gulf. Winter storm totally chocked the Methanol production in the Texas, with several Methanol plants was facing shutdowns within Louisiana. It was estimated that close to 90% of the total Methanol production of North America was halted by the storm in mid-April. Moreover, imports from South America also remained low due to some plant shutdowns. Mitsubishi’s Venezuela plant Metanol de Oriente, having capacity of 750,000 MT per year faced turnaround during January. In addition, Methanex extended shutdown of its Methanol plant in Trinidad for indefinite time. This plant has a capacity of 600,000 MT per year. Extended marked gains, Methanol contract price settled by Methanex corp. for the month of April was around USD 519 per MT.
The Asian Methanol supply remained tight throughout Q1 2021, and price remained uplifted initially during January and February but later reduced till end of the quarter. There were several reasons behind the fluctuation in prices, one of them being Chinese Lunar Holidays that hampered the overall production of the country, which ultimately reduced the inventory levels and created shortage across the region. Another reason was hike in prices of European Methanol which was close to USD 430 per MT during February. Moreover, Methanex, a global Methanol producer declared the closure of New Zealand based Waitara Valley Methanol producing facility, due to business losses and was unable to sustain the production.
In Europe, Methanol supply remained tight amid moderate demand from the domestic market. The imports of Methanol were strictly low across the region due to several plant outages across North America. Although the import demand from several Asian countries was high, hence the domestic Methanol price skyrocketed during the first half of the quarter, which later reduced when the supply started to improve.
For the Quarter Ending June 2020
Asian Methanol market remained shrouded with uncertainties amid easing supply from the Middle east. Exported volumes to Southeast Asia continued to feel the pandemic pain despite lift in lockdown restrictions across several economies by the end of Q2 2020. Slowed demand from the downstream formaldehyde and solvent sectors, which comprise majority of the regional demand, led to mounting of inventories across the ports in India, Thailand and Singapore. Spot Methanol prices in China fell to record lows in the month of June, due to ample inflows of import cargoes further pressuring margins. Although the country seems to get over from pandemic blows, downstream demand is yet to rebound to the pre-pandemic levels.
Coronavirus weakened the Q2 demand outlook of the North American Methanol market, majorly driven by depressed dynamics in the US market. US Gulf coast spot Methanol prices slumped nearly to four-year lows as the nation continued to lead in terms of number of infections across the world. While downstream demand remained largely staged to the April levels, reduced blending of gasoline due to lower demand fundamentals further exacerbated the price fall. Monitoring the impact of persistent Methanol market dullness, several US giants such as Celanese and LyondellBasell cut their yearly capex plans and postponed their tentative plant expansions.