23 July 2008 18:26 [Source: ICIS news]
“We believe that the coal price environment makes it very difficult for Chinese methanol producers to continue the rate of exports witnessed in 2007,” the London-based international bank said in a research note.
The record-high methanol pricing environment in 2007 resulted in Chinese coal-based methanol’s being shipped into the export markets, HSBC said.
The analysts estimated that ?xml:namespace>
But while methanol prices remained strong in 2008,
The situation was serious enough to warrant the suspension of thermal coal exports by the government until April in a bid to control prices, the analysts said.
HSBC said it expected global methanol fundamentals to remain tight over the next few, with the current high energy price environment expected to further drive methanol demand in fuel applications.
Some 20% of global methanol end-use demand was already in fuel products and additives, it added.
That correlation was even tighter than the correlation between methanol and crude oil prices, the analysts said, citing monthly data going back seven years.
HSBC rates Methanex shares “overweight” with a price target of $35.
The shares were up 2.18%, at $27.16, in early Wednesday afternoon trading in
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