Europe Q4 methanol to rise on higher spot, tight supply

28 August 2009 16:59  [Source: ICIS news]

LONDON (ICIS news)--The European fourth-quarter methanol contract price will rise substantially as a result of higher spot values, tight supply and better-than-expected demand, market sources said on Friday.

Estimates on the fourth-quarter price were at €180-250/tonne ($257-357/tonne), with most pitching their expectations around €200/tonne. The third-quarter price was agreed at €163/tonne FOB (free on board) Rotterdam, according to global chemical market intelligence service ICIS pricing.

“Spot is already around €200/tonne and it will probably go higher because the market is still tight and I think that will last until at least November. I think it could land near €250/tonne,” said a European trader.

Buyers agreed that a significant price hike was inevitable, but thought €250/tonne was optimistic on the part of sellers, adding that while demand had improved from earlier in the year, it was still way below typical levels.

Methanol is used in the manufacture of formaldehyde, acetic acid and methyl tertiary butyl ether.

($1 = €0.70)

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By: Shelley Kerr
+44 20 8652 3214

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