NPRA '11: Japan crisis overshadows Mideast methanol supply worries

27 March 2011 15:41  [Source: ICIS news]

SAN ANTONIO, Texas (ICIS)--Uncertainties over the impact on methanol demand following the Japan disaster will overshadow supply worries as a result of civil strife and conflict in north Africa and the Middle East, a major European consumer said late on Saturday.

“Japan is more critical. Its unknown what is happening and what the influence will be. A lot of exporters in China are serving Japan and China demand growth is not as strong as expected,” the source said on the sidelines of the International Petrochemical Conference (IPC).

"In Libya, it’s only a small plant,” the source said, adding that production in both Oman and Bahrain was unaffected by the wider political situation in both countries.

NOC Libya operates two 330,000 tonne/year plants at Marsa El Brega, which remain closed because of the fighting in the country.

If conflict and unrest in the region spreads, however, the situation could be very different with several worldscale plants located in both Saudi Arabia and Iran.

“It is a critical area right now, but as long as we don’t hear the opposite we are optimistic,” a second source said.

The impact of earlier civil unrest in Egypt was negligent, sources said, as the start-up of the Methanex plant at Damietta had already faced delays of more than a year and commercial production was yet to reach the market

The long awaited start-up of the unit is imminent though. A company source last week said that the 1.3m tonne/year plant in Damietta was now producing on-spec material and was expected to start shipping commercial volumes in two to three weeks. 

The double impact of these conflicting forces in the market has had the result of protracting contract negotiations for the second quarter in Europe as players were reluctant to fix a long standing price while these conflicting "push and pull" factors remain unclear.

The first quarter European methanol price was settled at a pre-discounted €315/tonne ($444/tonne) FOB (free on board) Rotterdam.

Hosted by the National Petrochemical & Refiners Association (NPRA), the IPC continues through Tuesday.

($1 = €0.71)

For more on methanol visit ICIS chemical intelligence

By: Shelley Kerr
+44 20 8652 3214

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