Rollover likely outcome for Europe fourth-quarter methanol contract

07 September 2012 16:05  [Source: ICIS news]

LONDON (ICIS)--The European methanol contract price will most likely rollover for the fourth quarter at €340/tonne ($430/tonne), the majority of market sources said on Friday.

European spot prices have been fairly stable in recent weeks and the market is more or less balanced with respect to supply and demand. As a result, there is little pressure on the market in either direction.

Although energy prices are up, which in turn can have a bearing on methanol prices, the Asia Pacific markets are currently relatively weak, and this is likely to minimise the likelihood of European prices increasing.

With more than three weeks remaining until the start of the new quarter, sources were keen to stress that much could change before a new price is agreed. Nevertheless, there was widespread agreement that if a different price is agreed, the movement is unlikely to be more than about €5-10/tonne in either direction.

Consumers in particular are in favour of stable contract pricing as significant changes must be passed on to downstream customers, which can prove problematic.

The European contract prices is settled on a FOB (free on board) Rotterdam basis.

($1 = €0.79)

By: Ross Yeo
+44 208 652 3214

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