26 September 2012 16:33 [Source: ICIS news]
By Heng Hui
The import market swung from backwardation to contango. Spot methanol prices in northeast and southeast Asia snapped more than four months of downtrend, rising to $355-370/tonne (€273-285/tonne) CFR (cost and freight) on 14 September, up by $5-9/tonne from the previous week, according to ICIS.
Prices were around $360-370/tonne
In the key China market, import prices of methanol were at $356-364/tonne CFR China last week, rebounding from $350-355/tonne in the previous week, but about 14% lower from the year’s high recorded on 4 May, ICIS data showed.
Speculative trades in the
In August, the country imported nearly 420,000 tonnes of methanol, representing a 21% increase from July, industry sources said. Official statistics from China Customs on August methanol imports are due for release at the end of September.
A decision by some Chinese oil majors not to import Iranian methanol might lead to a supply crunch in the country, since
Prices in the Indian market have been stable to weak because producers are saddled with inventory. In the week ended 14 September, Indian methanol prices were assessed at $305-325/tonne CFR (cost of freight)
Offers were as low as $300/tonne CFR India on 21 September. Buyers said their bids were at $295/tonne CFR India, based on a recalculation of what they can sell for in their domestic markets.
The 8.5% customs duty and charges of storage, customs clearance, surveying fees and the 3.5% contractual premium from the published spot prices are deducted from the local domestic prices to arrive at this figure.
But regional sellers are not under pressure to cut prices since they could divert cargoes to other regions where the netbacks are higher, market players said.
Methanol demand picked up in August, in line with increased production of downstream formaldehyde, acetic acid, dimethyl formamide, monomethyl acrylate, dimethyl ether in
The country is expected to beef up local production to make up for the shortfall of imports, market observers said.
In July 2012,
Methanol prices in the region had been weakening since May, weighed down by the off-peak season demand, until recently when the
Chinese methanol futures took the cue from the buoyant energy prices.
Buyers are inclined to lock in and conclude deals at fixed prices, but sellers preferred formula-based pricing on transactions seeing that the market is on an uptrend.
But the expected continuous increase in methanol spot prices may not mean higher real demand, according to some market participants.
Notwithstanding recent gains, methanol trades in southeast Asia have remained thin even after market players in
Market players said most buyers have been waiting on the sidelines for a clearer price direction to emerge.
($1 = €0.77)
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