17 September 2010 14:46 [Source: ICIS news]By Nigel Davis
The world is never as simple as some would like it to be. In methanol as in most other chemicals,
Jim Jordan of methanol consultants Jim Jordan & Associates suggested on Wednesday that
World methanol prices respond to
On paper, global methanol overcapacity is significant, but there is only one new plant outside of
Tightened international sanctions against
Effectively taking out millions of tonnes of capacity paints a different supply picture. Add into this mix the international potential for methanol use in fuels - a possible game changer - and the methanol world begins to look different.
But is there new-found buoyancy in the business, or simply the suggestion that market players have to realise that commodity markets cycle and that it’s best to plan or at least be prepared for every eventuality?
"I never dreamed in my wildest dreams that we would ever restart that plant," Methanex CEO Bruce Aitken told investment analysts at a conference this week. He was referring to the planned re-start of the company’s methanol plant at
Methanex wants to take advantage of the widened disparity between oil and natural gas prices. Methanol prices closely follow crude oil: the primary feedstock for methanol in
To put the disparity into perspective, under the 6:1 rule of thumb for oil and gas prices - oil contains about six times the energy equivalent of natural gas - natural gas prices in
But current natural gas futures prices are close to $4/MMBtu and have dropped 29% this year. Methanex says it has been able to secure a year’s supply of gas for the
Methanol demand in
“There are more surprises out there than supply/demand balances indicate,” a Statoil executive said at the World Methanol Forum. Factor in high oil prices and methanol prices look set firm.
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