US July methanol heads 6 cents/gal lower with Methanex posting

27 June 2012 17:24  [Source: ICIS news]

HOUSTON (ICIS)--The US July methanol contract headed lower on Wednesday as Methanex issued its monthly posting at 132 cents/gal (€0.28/litre), a decline of 6 cents/gal from its June number.

Southern Chemical Corp (SCC) has not yet issued its posting for July. In June, SCC posted 133 cents/gal. SCC and Methanex historically have set the range in monthly contracts for US methanol.

Spot prices have moved 6% lower in the past month, currently at 109-110 cents/gal, on expectations of a plant restart in Beaumont, Texas. A month ago, methanol spot barge prices ranged 116-117 cents/gal.

One market source said the 25-cent/gal gap between spot and the June contract numbers would have been hard to maintain from a customer relations standpoint.

“You can’t have that kind of discrepancy for long,” the source said. “Customers wouldn’t put up with it in this market.”

Gaps of 15-20 cents/gal between spot and contract have been common in the past year. The smallest has been an 8 cents/gal spread in late July 2011, with the largest 28 cents/gal in November. Suppliers usually give a discount to contract customers.

Spot prices now are only 1 cent/gal higher than where they were in late June 2011, when the range was 108-109 cents/gal.

Methanol tracks oil over long time periods, and last year at this time prices for West Texas Intermediate (WTI) crude were in the $92-96/bbl range, or at least $12-15/bbl higher.

Crude prices for front-month WTI NYMEX futures ranged $78.68-80.92/bbl.

($1 = €0.80)


By: Lane Kelley
+1 713 525 2653



AddThis Social Bookmark Button

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly

ICIS news FREE TRIAL
Get access to breaking chemical news as it happens.
ICIS Global Petrochemical Index (IPEX)
ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index