23 July 2010 21:00 [Source: ICIS news]
HOUSTON (ICIS news)--The US methanol contract for August appears to be heading for a rollover from July's $1.05-1.07/gal after a surprise move up in the spot range this week, market sources said on Friday.
The rise in the spot earlier this week muffled talk that the contract might fall to the $1.00-1.02/gal level.
A buyer on Friday said recent talk of oversupply had been short-lived, considering spot deals in the 91-94 cents/gal range this week. The source said he naturally wanted to see lower contract prices.
"But if you ask me what my head says, what my gut says, then I'd say it's going to be a rollover," the source said.
Another market source also expected a rollover for August, pegging the July spot price at 93 cents/gal and estimating August's spot price would be around 91 cents/gal.
The contract price increased in June to its present level, the first hike since December, when major sellers pitched their nominations just a few cents above the prevailing spot market values.
Plant issues in Trinidad appear to be resolved, with the restart of the 1.7m tonne/year Atlas plant and the 1.9m tonne/year M5000 unit underway. Talk last week also had the new Metor 2 unit up and running in Venezuela, prompting word of regional and global oversupply in coming months.
Canada’s Methanex and Houston-based Southern Chemical are the two major methanol suppliers to the US market, which imports about 77% of its methanol from Trinidad.
($1 = €0.77)
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