11 September 2009 17:38 [Source: ICIS news]
HOUSTON (ICIS news)--Buyers are hesitant to accept US methanol spot prices that have recently risen above the $1/gal ($333/tonne, €230/tonne) mark, voicing concerns that the run-up in prices may implode demand, sources said on Friday.
“The higher this price goes, the uglier it will get when it starts going back down,” a distributor said.
US methanol spot prices currently sit at 99-101 cents/gal, which represents a 40% increase since June and a 10-cent rise within the past two weeks, according to data from global chemical market intelligence service ICIS pricing.
“I did not think prices would go that high,” a US Gulf-based methanol trader said.
Adding to the mix is the current economic situation, which has put tighter credit limits on several buyers, including both small and large methanol purchasers, the distributor said.
“This [rise in pricing] is damaging to small guys in the inland markets, because it sets them up for a crash as credit lines have been trimmed, so buyers are not able to purchase as much volume to restock,” he said.
“All these buyers that have to purchase material right now may be faced with higher-priced inventories if this market crashes at a later time,” the seller said.
US methanol sellers include Methanex, Southern Chemical Corporation, BP and SABIC.
($1 = €0.69)
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