Muddled methanol

08 December 2003 00:00  [Source: ACN]

Traders are eager for sales talk of falling prices, whereas others claim that this is a peak demand season. Meanwhile, butadiene bids dip

Methanol: Some traders were claiming that the market would soften during December due to lower formaldehyde operating rates.

However, the winter season is, in fact, the peak season for plywood production with the build up to the Chinese New Year traditionally the strongest demand season for methanol in China, other traders and also producers said.

The majority view, therefore, was that prices would remain stable to strong until the New Year lull. Business was concluded at US$235-240/tonne cfr China early last week, with prices in SEA at US$220-230/tonne cfr SEA.

US gas prices were at US$4.60/mmbtu early last week, well below the US$6/mmbtu level necessary for spot material to be diverted from Asia to the States.

Methanex rolled over its November contract price into December at US$230/tonne cfr Asia. It claimed that some customers would have accepted US$10/tonne increases, but argued that price stability was its concern.

Naphtha: The MoPJ rose to US$300.75/tonne cfr Japan, US$4.75-6.75/tonne higher than the previous week, on the back of stronger crude values.

Traders reported that cargoes for second-half January delivery were being offered at a premium of US$9-10/tonne over the MoPJ, up from US$7-8/tonne the previous week.

London Brent crude was at US$29.14/bbl and West Texas Intermediate crude was at US$31.10/bbl on Thursday, up from US$27.86/bbl and US$29.74/bbl respectively the previous week.

Ethylene: South Korean offers rose to as high as US$490/tonne fob Korea last week from the previous week’s US$455/tonne fob Korea, on what was claimed was tight supply and strong PE prices (see page 42). Buyers were asking for US$480-485/tonne cfr China.

A 2500-tonne Singapore cargo was reported to have been sold at US$560/tonne cfr Indonesia, again for December lifting.

The market was dominated by term contract discussions for next year with the advantage said to be firmly with suppliers

Propylene: Only one December cargo was said to be available in SEA with the trader concerned asking for a rather optimistic US$620/tonne cfr SEA. Buyers were requesting US$580/tonne cfr SEA against the last reported business at US$585/tonne cfr Indonesia.

A 1500-tonne cargo had been sold at US$585-590/tonne cfr China for early December lifting.

Butadiene: Buying ideas were at US$650-655/tonne cfr China with sellers aiming for US$670-680/tonne cfr China. Business had been settled at US$660/tonne cfr China for December lifting, with SEA prices at US$660-670/tonne cfr SEA.

MTBE: Buying ideas weakened by US$10/tonne to US$345-350/tonne cfr China, despite surging demand. Traders attributed the softening to `market volatility’. No offers were reported.

Several enquiries were heard from Chinese customers. But a South Korean producer said no material was available until end-December, Q4 being a high demand season.

Ammonia: Prices for January cargoes were at US$260-270/tonne cfr NEA, a rollover from December.

China Petrochemical Development Corp was hoping to settle a 20 000-tonne cargo for January delivery by 15 December.

Bulk chemical spot prices, US$/tonne

	Asia/Pacific spot NE Asia1	S Asia and SE Asia2	US/Euro contracts US3	NWE4
Naphtha	300.75 cfr Japan	-	na	na
Ethylene	455	560 cfr Indon	622 Aug	512 Q4
Propylene5	585-590 cfr China	585 cfr Indon	463 Oct	425 Q4
Butadiene	660 cfr China	660-670	639 Nov	520 Q4
Methanol	235-240 cfr China	220-230	190 Q4	193 Oct
MTBE	350-360 cfr China6	360 fob Singapore6	na	na
Ammonia	260-270 cfr NEA	271 cfr India6	265 cfr US Gulf 2H Nov	na
1 prices are fob Korea unless otherwise indicated
2 prices are cfr SEA unless otherwise indicated
3 US prices are Aug contract le­vels in US$/tonne on an fob basis, courtesy of ECN, unless otherwise stated
4 European free-delivered Q4 contract prices in Euro/tonne unless otherwise stated
5 polymer grade 6 no recent confirmed deals	MoPJ = Mean of Platt's Japan		na = not available
Prices contained in this report are obtained by the ACN team through consultation with producers, consumers and merchants in the regions indicated. They are a guide to price levels of recent business and reflect medium to large tonnage sales. Spot prices are quoted as indicated: cfr - cost and freight; fob - free on board; cif - cost, insurance and freight; FD - free delivered. Spot prices are based on information available mid-week prior to the date of issue. Dollar prices are based on prevailing rates of exchange.

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