03 August 1998 00:00 [Source: ACN]
Methanol prices last week slipped to as low as US$103/tonne cfr China for August lifting as one Asian producer admitted that it was selling below variable costs.
The sale at US$103/tonne cfr China of 3000-5000 tonne represents a US$7/tonne fall from a deal reported in late July and is the lowest Asian methanol price for at least three years, said traders.
Methanol prices kept falling despite two turnarounds - one which had just been completed at Kaltim Methanol Industri's 660 000 tonne/year facility in Bontang, East Kalimantan, Indonesia, and the other at the 660 000 tonne/year Petronas plant in Malaysia which began on 31 July, with full operations due to resume on 1 September.
'We are selling at below variable cost. If it were not for technical considerations, we might have to temporarily close down our plant,' one Asian producer told ACN.
A Japanese trader said a principal cause of the collapse in methanol was huge reductions in demand for formaldehyde. Formaldehyde consumption fell in Thailand and South Korea by 30-40% and 40-50% respectively in H1 compared with the same period in 1997, the trader estimated.
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