14 January 2010 03:47 [Source: ICIS news]
By John Richardson
SINGAPORE (ICIS news)--Multiple production issues are likely to keep Asian methanol markets tight until at least May after which new supply might give struggling buyers more leverage, said Mark Berggren, managing director of Singapore-based consultancy, Methanol Market Services Asia (MMSA).
“There are many operating issues keeping supply tight in Asia at the moment including those in ?xml:namespace>
Supply could ease after May with the start-up of new plants in
“Sometime in the second half, assuming that there are no further unexpected operational issues, buyers’ options will increase and this will limit the margins of the Chinese coal-based producers.”
Global methanol production will rise by approximately 2.7m tonnes in 2010 from 2009, estimates MMSA. Production by 2014 is forecast to reach almost 54.0m tonnes.
Good news on the demand side of the equation is, as usual, from
The country would consume 18.1m tonnes in 2010 and would become the biggest consumer of any region in the MMSA global supply and demand balance, said Berggren.
The biggest driver of this robust growth in
“Under normal circumstances end-uses requiring the most amounts of methanol to make each unit of product would typically be able to pay the least,” he said.
“But those using methanol for gasoline blending and for producing dimethyl ether (DME) in
The outlook for the West is nowhere near as rosy as a result of weak consumer spending in the
A further problem is that demand in the West is limited to traditional end-uses such as acetic and formaldehyde where the upside is less than in energy.
The big question remains whether the rally in crude, which began in H1 last year, will be maintained.
“We don’t expect any major changes in energy prices this year on the assumption that the flight of money to commodities, supported by the fiscal policy of Western governments, doesn’t dry-up,” added Berggren.
He predicted that firm crude could squeeze
The coal industry will be better able to raise prices in line with firm or higher oil, he said.
The annual MMSA Methanol and Derivative Analysis is published in March 2010. It offers a globally integrated analysis of methanol, formaldehyde, acetic acid, MMA, methylamines, methyl tert-butyl ether (MTBE) - and all other major methanol end uses, with additional attention to the developing energy applications.
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