High methanol costs drive downstream price hikes
18 October 2007 23:01 [Source: ICIS news]
HOUSTON (ICIS news)--Rising feedstock methanol costs have shaken up prices in the normally static chloroform and methylene chloride markets, sources said on Thursday.
Industry participants said a major US chloroform and methylene chloride producer implemented a 7 cent/lb ($154/tonne) price increase for both products on 12 October to recover profit margins after methanol prices suddenly spiked earlier this month.
Sources said the price increase would affect spot prices immediately and contract prices after a 15-30 day notification period.
The increase pushed US chloroform domestic spot prices upward into the 43-49 cents/lb ex-tank range and exports to 45-48 cents/lb FOB (free on board) USG (US Gulf), according to global chemical market intelligence service ICIS pricing.
The last time the US chloroform price changed was in November 2005, according to ICIS pricing.
The increase pushed US methylene chloride domestic prices upward into the 42-46 cents/lb ex-tank range and exports to 32-36 cents/lb FOB USG, according to ICIS pricing.
October non-discounted feedstock methanol prices settled at 165-170 cents/gal, up from 96 cents/gal in September. The October methanol contract price is the highest since January and was primarily triggered by production losses at a major supplier’s production facility in Chile.
Sources said another chloroform and methylene chloride price hike might be necessary if methanol prices increase further or hold their lofty position into the first quarter.
Chloroform and methylene chloride are primarily used as feedstock in refrigerant manufacturing.By: Greg Holt
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