27 October 2009 21:53 [Source: ICIS news]
HOUSTON (ICIS news)--High spot prices will likely push November North American methanol contract prices up, industry sources said on Tuesday.
“There’s no reason not to rise if you look at where the spot market is,” a seller said.
Spot prices are trading at 90-95 cents/gal ($299-316/tonne, €200-212/tonne) FOB (free on board) USG (US Gulf), up around 15% from deals done earlier in October at 78 cents/gal, according to data from global chemical market intelligence service ICIS pricing.
October North American contracts stood at 93 and 95 cents/gal, and November contract nominations are expected to come out later this week, according to market sources.
Contract prices, nominated monthly by Southern Chemical Corp (SCC) and Methanex, usually run at a premium to the spot price, which generally dictates the direction of contract pricing, market players said.
A buyer noted that the lack of a gap between spot and contract levels may indicate to some players that contract prices will rise.
“[That would be] pretty shaky for the big guys to raise contract prices on that basis, but they probably will,” a distributor said.
($1 = €0.67)
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