US Gulf spot methanol trades below $0.70/gal

05 April 2007 16:42  [Source: ICIS news]

HOUSTON (ICIS news)--US Gulf (USG) spot methanol posted further losses early on Thursday, with April business confirmed done at 68 cents/gal - the lowest level since December 2003.

However, slow seasonal demand and high inventories that had characterised the USG methanol market in recent weeks appeared to be changing, consumers and distributors said.

“Talks of there being plenty of product and tanks full are not so true any more,” a trader said. “I have had no problems finding homes for product.”

Wednesday’s ending price range at 67-69 cents/gal (€0.51/gal) FOB (free on board) reflected the most recent spot April trade at 68 cents/gal.

The last time prices were at such levels was 16 December 2003, when values were assessed in a range of 67-70 cents/gal, according to global chemical market intelligence service ICIS pricing.

With spot prices continuing to erode, the April spot-contract spread averaged 34 cents by mid-week. In line with the soft market sentiment, Methanex announced an April contract price at $1.01/gal FOB, 54 cents below the company’s March price of $1.55/gal.

Southern Chemical followed at $1.03/gal FOB, down 45.5 cents from its March price.

Spot prices for April shipments were not likely to move below 65 cents/gal FOB due to planned maintenance at several plants through end-April, sources said.

($1= €0.75)

By: Kristie Watthuber
+1 713 525 2653

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