26 May 2011 18:16 [Source: ICIS news]
HOUSTON (ICIS)--The US June methanol contract headed for a rollover on Thursday for the fifth month in a row as Methanex nominated 128 cents/gal (€0.24/litre).
Methanol sources earlier this month expected the monthly contract to roll over unless crude prices dropped significantly.
NYMEX crude futures reached their high for the past three months, $115.27/bbl, on 2 May and then tailed off, touching a low of $95.18/bbl on 6 May.
Spot barge prices have stayed within a tight span of 104-109 cents/gal FOB (free on board) US Gulf during the past month, lodged about 20 cents/gal lower than the monthly contract range at 126-128 cents/gal.
Buyers typically complain that the contract is overpriced as the gap with spot prices widens.
Over the past year, the methanol contract-spot spread has widened to as much as 30 cents/gal in January, and narrowed to a spot price that was 6 cents/gal higher than contract prices in October 2010.
The contract-spot gap has averaged about 13 cents/gal on a monthly basis since June last year.
Methanex and Southern Chemical Corp (SCC) typically have set the monthly North American contract methanol range with their nominations. SCC has not issued its nomination yet.
($1 = €0.71)
For more on methanol visit ICIS chemical intelligence
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