US methanol spot prices surge amid tighter supply

22 August 2007 00:03  [Source: ICIS news]

HOUSTON (ICIS news)--US Gulf spot prices for barge methanol have risen by about 15 cents/gal ($50/tonne), or around 20%, from the start of August as supply-side factors have tightened the market, market participants said on Tuesday.

Traders and other market watchers cited methanol production problems last month in Venezuela and Chile as the main reason for the upward trend in methanol prices.

Sources said Venezuelan methanol production has since returned to normal, but in Chile Methanex continues to idle three of its four units due to natural gas constraints, traders said.

In late July, Methanex said an additional unit would be restarted within weeks.

Spot bids and offers were pegged at 91-94 cents/gal FOB (free on board) USG (US Gulf) on Tuesday.

On 1 August, methanol spot prices were assessed at 75-79 cents/gal FOB USG, according to global chemical market intelligence service ICIS pricing.

North American market observers said the recent uptick in spot prices could support an increase in contract prices for September. The leading regional suppliers, Methanex and Southern Chemical, are expected to nominate September non-discounted contract prices in the coming week.

By: David Barry
+1 713 525 2653

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