29 July 2010 21:17 [Source: ICIS news]
Combined with the move by Southern Chemical (SCC), which on Wednesday cut its July contract from $1.07/gal to $1.05/gal, the US August methanol contract now stands at $1.05/gal. That compared with the average price of $1.06/gal for July.
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.
Methanex CEO Bruce Aitken confirmed the rollover of the company's July price into August, and also solved some of the mystery about a surprise hike in the US spot methanol range earlier this month by saying that the company had been buying methanol.
"We've also been an active participant in the spot market," Aitken said in a conference call. "There is not a lot of spot methanol around."
Spot methanol prices rose in mid-July to 91-94 cents/gal from 89-91 cents/gal, prompting talk that the then-unknown source of the buying was "obviously short" of material, as one observer put it.
Aitken described the company's supply predicament as being at the low end of its preferred minimum inventory.
The May outage of the Methanex Atlas plant in Trinidad caused 190,000 tonnes of lost production for the company, trimming its inventory to the lowest end of what it considers minimum levels, Aitken said. The plant restarted in late June with a lower inventory than usual, he said.
"There is a reasonable balance of supply and demand now, and there is not much inventory around," Aitken said.
Spot prices have clustered around the low 90 cents/gal since the Atlas outage - still about 20 cents/gal above the levels seen before the plant went down.
($1 = €0.77)
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