03 June 2011 20:25 [Source: ICIS news]
HOUSTON (ICIS)--The rise in spot barge prices for US methanol this week baffled most market sources, who said on Friday there were no significant production or supply issues to prompt recent buying.
Spot methanol ended the week at 109–111 cents/gal, a 1% increase over the previous weekly range.
A producer sold 10,000 bbl to Mitsui for June delivery at 111 cents/gal, and sources said Mitsubishi also bought two barges at 111–111.5 cents/gal.
One source had also heard of a deal done at 112 cents/gal, but it could not be confirmed.
A popular formula based on crude futures pegged the spot price at 110 cents/gal based on a crude price of $100/bbl.
“Other than just trying to run it up, there is no substantial reason I see for spot to be this high,” a seller said.
Another source had heard that a BP ship was late for delivery to the US. A methanol buyer cited the ongoing power shortage in China, which could raise export prices from North America.
China is grappling with its worst power shortage in years, particularly in the country's main industrial bases in the east and south, according to sources.
But none of the methanol sources said they had a satisfactory explanation for the rise in US spot prices.
“It could be just somebody trying to take a position for the long haul,” a buyer said.
The only production issue cited as a possible factor was an ongoing turnaround in Venezuela at the Metor 1 plant, which was announced in mid April. A source close to the plant said the turnaround was expected to end on 20 June.
($1 = €0.69)
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