Reduced Mideast imports push Europe spot methanol up 6%

05 June 2009 17:17  [Source: ICIS news]

LONDON (ICIS news)--European spot methanol values have moved 6% higher this week on tightening supply due to reduced imports from the Middle East, market sources said on Friday.

Several thousand tonnes were traded this week on the European spot market, with June deals reported at €139-143/tonne ($196-201/tonne) FOB (free on board) Rotterdam.

July was confirmed in a €143-146/tonne range. A 1,000-tonne, third-quarter strip was also sold at €140/tonne.

“Plant outages in the Middle East will have an impact on volumes available in June, July and August,” said one European producer, adding that several traders were taking positions in the spot market.

Iran's state-owned National Petrochemical Co (NPC) shut its 1.65m tonne/year mega methanol Zagros I plant in Assaluyeh on 21 May for 30-45 days.

SABIC said that methanol plants with a combined capacity of 5.7m tonnes/year were running at reduced rates of about 90% due to water problems.

Additionally, the Chinese market offered better netbacks for Middle East producers, which had led to volume being diverted to that market, traders said.

“Demand [and prices] in China [are] still keeping marginal volumes away from Europe,” a European trader said.

Market sources speculated that higher spot values might lead to an increase in the third-quarter contract price, but most said they had not yet engaged in negotiations.

($1 = €0.71)

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By: Shelley Kerr
+44 20 8652 3214

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