US Methanex says outages, supply issues raising methanol prices

28 July 2011 22:05  [Source: ICIS news]

Methanex CEO Bruce AitkenHOUSTON (ICIS)--Methanex’s top executive said on Thursday that plant outages, strong oil and coal values and low inventories are behind the latest rise in methanol prices.

Methanex CEO Bruce Aitken noted in the company's earnings conference call that his company raised its August contract prices this week for North America and Asia because of planned and unplanned outages and supply-related issues.

Aitken cited the recent outage at the company’s 1.7m tonnes/year Atlas plant in Trinidad, reduced production at facilities in China and low inventories as an example of problems leading to tighter conditions in the methanol market. “There is significant upward pressure on methanol prices,” Aitken said.

Aitken said he told the Methanex board recently that the company currently is in “the best situation I’ve ever experienced in the methanol industry for Methanex,” he said.

One lingering problem for Methanex continues to be finding natural gas to run its plant in Punta Arenas, Chile, which is operating at only 50% capacity, according to the company.

Methanex has been searching for new gas supplies in southern Chile for at least two years. But residential gas usage peaks in the winter, and the company said in its quarterly report that “the short-term outlook for gas supply in Chile continues to be challenging”.

Aitken said the company will decide by the end of this year whether to close the plant and move it or whether to re-power it by coal gasification.

The Methanex chief did not say where the Chilean plant might be moved, but he did say that Methanex was discussing long-term gas contracts with three or four unnamed parties in the US Gulf.

For more on methanol, visit ICIS chemical intelligence

By: Lane Kelley
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