Corrected: Methanol arrivals from Iran to China to fall further in May

08 May 2012 10:30  [Source: ICIS news]

Correction: In the ICIS news story headlined “Methanol arrivals from Iran to China to fall further in May” dated 8 May 2012, please read in the 10th paragraph … Kharg Petroleum Co (KPC)  … instead of … Kuwait Petroleum Corporation (KPC) … A corrected story follows.

SINGAPORE (ICIS)--Methanol arrivals from Iran to China will be reduced to 100,000 tonnes in May because of the difficulty in chartering ships to carry goods from Iran, industry sources said on Tuesday.

Major European insurers are ceasing coverage of oil and chemical exports from Iran as the EU ban on European insurance coverage for Iranian petrochemical shipments began on May 1, an industry source said.

“Exports from Iran are heavily restricted by a lack of ships. Freight rates also rose sharply, which impacted the methanol market,” he said.

Methanol exports from Iran to China dropped to 150,000 tonnes in April from the previous monthly average of 300,000 tonnes, according to data from China Customs.

“Iranian methanol producers have not been able to find any suitable ships to deliver methanol since 10 April,” a market player said.

Shipping companies in China said they have received enquires from Iranian producers on the cost of chartering a ship in China to make the delivery from Iran to China.

The rates were at least $100/tonne (€77/tonne) after increasing to $95/tonne (€73/tonne) on 24 April, according to shipping companies.

This is compared to international freight rates from Iran to China which had been stable at $50/tonne on average for long-term charters and $60-80/tonne for temporary charters for the past few years, according to shipping companies. 

Major methanol producers in Iran have shut their plants or are running them at lower capacities because of the reduced exports, another industry source said.

Kharg Petroleum Co (KPC) cut the run rates of its 660,000 tonne/year methanol unit on Kharg island to 50% of capacity, according to the company source.

Iran’s Zagros Petrochemical Co (ZPC) shut its No 1 1.65m tonne/year methanol unit for maintenance from 14 April, while Fanavaran Petrochemical Company (FPC) has been running at its 1m tonne/year methanol unit at low rates.

According to industry sources, because of the difficulty in chartering ships for the delivery of methanol, some Iranian producers are cleaning vessels used for transporting oil with the intention of using them to transport methanol instead.

($1 = €0.77)

By: Xin Wang

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