Europe methanol supply to feel impact of Iran sanctions in June

01 June 2012 15:49  [Source: ICIS news]

LONDON (ICIS)--The physical implications of trade sanctions against Iran on European methanol supplies will be felt by mid-to-late June, a producer said on Friday.

Given that Iran is a significant producer with 5m tonnes/year of nameplate capacity, the sanctions have already had some affect on the European and global methanol market, however, despite the lost volumes, there is little evidence of actual tightness in the market and the impact has been primarily on sentiment.

Europe has lost approximately 500,000 tonnes/year of Iranian imports, while key Asian markets, such as India and China, are also suffering from a significant reduction in Iranian supply as vessel owners and insurance providers refuse to deal with the material.

Yet despite these changes, markets are not actually suffering from a lack of product; more a perception that supplies in the future will be tight.

Inventories are at adequate levels and negative economic news has led to the fairly widespread belief that demand in Europe will soon weaken, if it has not already. Demand in China is already said to be a relatively poor levels.

However, a European supplier believes there will be an undeniable reduction in availability in Europe come mid-to-late June, if no significant developments take place.

“At the moment, people have 5,000-6,000 tonnes in tank and they are not so worried. But soon these volumes will not be there,” the supplier said.

By: Ross Yeo
+44 208 652 3214

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