29 October 2010 16:54 [Source: ICIS news]
LONDON (ICIS)--Carbon dioxide (CO2) emissions targets have contributed to the low level of methanol capacity utilisation currently being seen in ?xml:namespace>
Although China has a total methanol capacity of around 28m tonnes/year, well below the Chinese demand of 20m tonnes/year, the economically-viable capacity is much lower because the price of methanol does not usually justify running plants at the higher end of the cost spectrum.
The level of capacity utilisation operates according to a cost curve: the higher the price of methanol, the more high-cost plants are activated, which increases supply and brings down the methanol price.
As prices fall, the high-cost plants are no longer cost efficient and are shut down. Because of this, supply is reduced and prices rise.
As Asian prices have risen to as high as $370/tonne (€266/tonne) CFR (cost and freight)
The major global producer said that
According to the producer,
“The cost curve just isn’t reacting…this is the lowest production rate [in
It was expected that the restrictions would be lifted in 2011, as
However, it was likely additional internal restrictions on natural gas supply would not be lifted until after winter, in around March or April 2011, the producer said, while a bottleneck on coal transport from coastal regions to inland facilities was also exacerbating the situation,.
Methanol prices in
($1 = €0.72)
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