Most sources in the European methanol market describe balanced conditions this week, despite the onset of the summer holiday season.
Although supply and demand are equal, prices gradually increased during the week.
Sources attribute higher values to the fact that methanol prices are increasing in both the US and Asian markets due to tight supply conditions. Some say there is a need for European numbers to achieve equilibrium with the two regions.
One source believes, however, that higher prices are simply due to general market volatility, whereas another says that healthy demand is leading to firmer values in the market.
Supply is also described as healthy, however, one producer believes it is verging on snug due to an outage at Saudi Methanol’s 1.7m tonne/year Ar-Razi 5 plant at Al Jubail, Saudi Arabia.
One source believes that this plant has restarted, however, this could not be confirmed elsewhere.
Despite this outage, other sources predict that the methanol market will remain stable in the coming weeks.
There was no further news about the unexpected shutdown of the 1.7m tonne/year Atlas plant in Trinidad last week.
Sources remain unsure over whether the shutdown will be short or whether the scheduled maintenence due to take place in September will now be brought forward. If this is the case, it is thought the plant could be closed for around a month.
Some believe that the closure of the Atlas plant in Trinidad will affect US methanol moreso than the European market, with one source believing the impact on the US market will be purely psychological.
One buyer has been concerned as downstream demand in Asia dipped in recent weeks, but believes that it is gradually increasing again.
Production news
One source believes Saudi Methanol’s 1.7m tonne/year Ar-Razi 5 plant at Al Jubail, Saudi Arabia, is back online, however, this could not be confirmed elsewhere in the market. The plant was shut due to technical problems two weeks ago.
Zagros Petrochemical Company took its 1.65m tonne/year Zagros II plant in Asaluyeh, Iran offline for one month of planned maintenance on 3 July.
There was no further information on Petronas’ 1.7m tonne/year No2 plant at Labuan, Sabah this week, which went offline following an unplanned shutdown in early June.
NOC Libya’s two 330,000 tonne/year plants at Marsa El Brega remain shut because of the violence in the country.
The Netherlands-based biomethanol company BioMCN plans to shut its 500,000 tonne/year plant at Delfzijl in the Netherlands for a month during the third quarter.
There were two spot methanol trades at €270/tonne FOB Rotterdam for August and September in the European market. Bids and offers had firmed throughout the week with sources attributing this to upward price movements in the US and Asian markets due to tight supply.
Asia methanol prices closed higher amid limited availability with prices at $375-383/tonne CFR China.
The US methanol August contract rose 10-11 cents/gal to the highest point for the monthly range in almost three years, 137-138 cents/gal, according to posted prices issued by two major producers during the week ended 29 July. Spot barge prices continued to move up, reaching 118-120 cents/gal by the end of the week. Sources cited the outage at Methanex’s Atlas plant in Trinidad as a big reason for the move.
($1=€0.70)
This week on ICIS news ( www.icis.com ):
29/07/11 US methanol contract prices almost reach 3-year high on outages
28/07/11 US Methanex says outages, supply issues raising methanol prices
28/07/11 China’s Qinghai Zhonghao to shut methanol plant on 1 August
28/07/11 Methanex Q2 net profit nearly triples on strong methanol prices
27/07/11 Methanex nominates 138 cents/gal for August US methanol, up 8%
