| CFR China mid point (USD/ Tonne) | 358.50 |
| Average of CFR China in November ( USD/tonne) | 358.9 |
Subscriber note:
ICIS will not publish the weekly Methanol (Asia Pacific) report on 28 December 2012 as it is a non-publishing date. For more information please check the publishing schedule at www.icis.com.
ICIS intends to rename CFR Southeast Asia to CFR SE Asia Main Ports to clearly state the assessed regions Singapore/West Malaysia/Dumai from 1 January 2013. Please send any comments to hui.heng@icis.com.
ICIS will be cancelling the FOB China quote for the Methanol (weekly) report from 1 January 2013 as there are no export trades. Please send any comments or queries to hui.heng@icis.com .
ICIS pricing will include deals with longer credit terms in the CFR China price assessment in the Methanol (Asia) weekly report through a process of normalisation to a LC 30-60 days equivalent starting from 13 August 2012. ICIS also intends to change the basis of assessment to LC 30-90 days from LC 30-60 days from 1 January 2013 to reflect trade terms. A standard normalisation process for cargoes which fall outside this basis will continue.
ICIS is also considering including the prices of bonded warehouse cargoes in the CFR China assessment in the absence of confirmed deals. The prices of new cargoes will be normalised to be equivalent to a shipment yet to be loaded. For the full methodology, please go to www.icis.com/chemicals/methanol/price-reporting-methodology/. Please address comments to hui.heng@icis.com.
ICIS plans to widen the assessed delivery period to two-six weeks forward from the existing assessed timing of four-six weeks forward in its Methanol (Asia) daily and weekly reports. The prices published refer to spot prices subject to import duties of Middle Eastern origin. Deals which are not subject to import duty because of the free trade agreements (FTA) will be included in the assessment, but such prices will be normalised to levels equivalent to those subject to import duties. Please send any comments to hui.heng@icis.com .
ICIS pricing intends to change the methodology of the sizes of Southeast Asian spot cargoes assessed to 2,000-5,000 tonnes from 1,000-3,000 tonnes in the Methanol (Asia) report to better reflect trades done in that region. Please send any comments to
hui.heng@icis.com .
| Deals and discussions in the week |
China
Reported deal by buyer: a 13,000 tonne cargo at $358/tonne CFR China, January arrival.
Reported deal by buyer: $362/tonne CFR China, 5,000 tonnes , December loading
Reported deal by seller: $355/tonne CFR China, 5,000 tonnes, December loading
Deal: $359/tonne CFR China, 5,000 tonnes
Offers: $360-365/tonne CFR China
Formula buying and selling ideas: 0.5% discount-0.5% premium to spot publication prices
Unconfirmed market talk about some cargo transacted lower but was due to payment issues
South Korea
Discussions: $360-365/tonne CFR Korea
Offers: $370/tonne CFR Korea
Formula deal: flat (0%) to spot publication prices
India
Selling notion: $20-30/tonne below benchmark China prices, non-Iranian origin
Buying idea: $280-300/tonne CFR India
Formula discussions: 1-4% discount as reported by buyers, unconfirmed, Iranian origin, Iran sellers declined comment
Formula ideas: 3-5% premium , non-Iranian origin
Taiwan
Reported formula deal: 0-(-0.5%)
Southeast Asia (major ports in Singapore, Malaysia)
No discussions
Clarification of report on 30 November- please see SE Asia text below
| Asia methanol prices largely stable on deals, discussions |
Methanol prices in Asia were assessed as largely stable to reflect deals heard in the week ended 14 December.
Inventories in China were up by 5% by the end of November, at around 540,000-550,000 tonnes. Tight natural gas supply with the redirection of gas for heating in winter arriving caused production suspension and output cuts at some gas based methanol units in north and southwest China. In the long term, prices might lack growth momentum, given the softening demand from downstream formaldehyde and DME industries in mid-to-late December owning to low consumption from economic uncertainty, ample supply from coal based methanol plants, as well as producers’ de-stocking before the year-end.
The announcement in China about a new consumption tax next year on certain petrochemical products including methyl tertiary butyl ether (MTBE) remains unclear. Demand for MTBE, especially for imports, might fall because of the possible consumption tax as the Chinese gasoline blenders would have to pay the consumption tax of yuan (CNY) 1.0/litre for gasoline and an unstipulated amount for MTBE, which is used as an octane booster in gasoline.
On a separate note, an $850m methanol-to-petchem project will be built in a new industrial area in Trinidad and Tobago. The project is led by a group, which includes Japan’s Mitsubishi Gas Chemicals (MGC), according to a statement from the Trinidad and Tobago government on 10 December.
The project, which will convert methanol to dimethyl ether (DME), will be built on 50 hectares of land at the Union Industrial Estate in La Brea, the country’s energy minister Kevin Ramnarine said.
The announcement follows a similar, but much larger, project announced earlier this year. A group led by Saudi Arabia’s SABIC and China’s state-owned Sinopec has plans to build a methanol facility in Trinidad.
China’s leading petrochemical engineering company Wison Engineering Service on Thursday launched an initial public offering (IPO) that will raise approximately Hong Kong dollars (HK$) 1.36bn ($175.5m) to finance its future developments. Wison Engineering’s main focus is on three industries; petrochemicals such as olefins and aromatics, oil refining that processes crude into oil products and coal-to-chemicals such as coal to methanol and methanol to olefins (MTO).
Some market participants expect the first quarter methanol prices to remain largely steady while fluctuating in a narrow band, given the softening downstream demand towards Chinese New Year from the downstream DME and formaldehyde industries, and restricted cargo deliveries to other regions because of frequent snows and fogs. However, relatively snug spot supply from non-Iranian should balance the demand overhang.
Prices in the Chinese market were assessed as stable to firm, based on deals heard done in the week. (see deals section)
As the weather in China grows colder, the government has imposed restrictions on natural gas usage to give priority to residential areas for heating purposes, followed by businesses and lastly the production industry, a market source said.
Some methanol units in north China have been shut or have their operating rates lowered in response to the feedstock natural gas shortage, a trader based in north China said.
Prices for domestic parcels remained largely stable on the back of deals concluded.
Prices were assessed as stable on the back of prevailing discussions. The assessed price range was wide based on the disparing Iranian and non Iranian buy-sell ideas. (see deals section above)
Indian traders and an end-user said they would cap their bids at $280/tonne CFR India, saying demand was weak and they were more than adequate with contractual supplies.
A trader said at least 75,000-80,000 tonnes was expected to be shipped from Iran alone this month and simultaneously demand was weaker than the required 100,000-130,000 tonnes per month.
Import prices were assessed as stable. There was a formula priced deal done at a discount to spot publication prices. The buyer said it would not purchase higher than $360/tonne CFR Taiwan.
A trader reported receiving bids at below $360/tonne CFR SE Asia, but had not launched into serious discussions by 17:00 hours Singapore time. Another market participant was mulling over offers at above $370/tonne CFR SE Asia.
Prices were rolled over in view of inconclusive discussions.
A Malaysian non-dutiable cargo that was reportedly sold in the week ended 30 November was priced at a premium and not at a discount, according to the seller. All spot and contract cargoes are priced at a premium, the seller said. However, this could not be confirmed with the buyer.
Prices were assessed as stable on the back of prevailing discussions.
A major trader in the market said he received offers at over $370/tonne CFR Korea but had not concluded by 17:00 hours Singapore. A Korean trader said he was in discussions with an end-user for cargoes at $360-365/tonne CFR Korea.
Indonesia’s Kaltim Methanol Industri (KMI) plans to restart its 660,000 tonne/year methanol plant at Bontang in eastern Kalimantan on 16-18 December after 1.5 months of maintenance, a company source said. The dates are still tentative as the company is currently awaiting updates on its maintenance.
Oman’s Salalah Methanol Co (SMC) is running its 3,125 tonne/day methanol plant in Salalah at 100% capacity after restarting it on 25 November, a company source said. It was shut for two weeks for maintenance.
Ar-Razi Saudi Methanol has maintenance plans for its 1.7m tonne/year No 5 methanol plant at Al-Jubail in Saudi Arabia next year, a company source said. Details on the dates and duration have not been finalised.
China’s Huadian Yulin Natural Gas Chemical (Huadian Yutianhua) is planning to bring on line a 600,000 tonne/year coal-based methanol unit at Yulin in Shaanxi on 20 December, a company source said on Monday.
The company completed construction work and equipment installation in September, and is conducting trial runs at the new plant, the sourced added, without providing further details.
The company is running another 610,000 tonne/year natural gas-based methanol unit at 95% capacity, which is located at the same site, according to the source.
China’s Lanzhou Bluestar has shut down its 200,000 tonne/year methanol unit at Lanzhou in Gansu on 1 December because of lack of natural gas feedstock during winter season, a company official said on Monday.
The company shut down the methanol unit from 1 December 2012 to the beginning of spring , possibly in March, as a result of a shortage of natural gas during peak consumption period, the sourced added.
China’s Chongqing Kabeile may delay the start-up of its new 850,000 tonne/year natural gas-based methanol plant at Chongqing in southwest China to the end of December this year because of tight supply of feedstock natural gas, a company source said.
China’s Tuha Oilfield has shut its 240,000 tonne/year methanol unit at Tulufan in Xinjiang on 18 November because of a lack of feedstock natural gas during winter, a company official said. The company will restart the plant at the beginning of March or April.
China’s Ningbo Heyuan Chemical aims to start up its 600,000 tonne/year MTO plant at Zhejiang province at the end of December, a company source said on 23 November.
The start-up schedule has been put off by one month because of slower-than-expected progress, the source said. The new plant will produce 200,000 tonnes/year of ethylene and 400,000 tonnes/year of propylene, the source said.
These will be fed into the downstream 300,000 tonne/year polypropylene (PP) unit and 500,000 tonne/year monoethylene glycol (MEG) plant at the same site at Ningbo Industry Zone in eastern China’s Zhejiang province.
The plant requires 1.8m tonnes/year of methanol to run at full capacity and has secured supply, the source said.
($1 = Rs54.61)
($1 = CNY6.23)
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