24 October 2012 22:01 [Source: ICIS news]
HOUSTON (ICIS)--Last week’s manic buying in US methanol has prompted market sources to expect a considerable rise in the November contract, by 10-15 cents/gal higher, sources said on Wednesday.
“I would guess they will raise it 10-12 cents/gal, to maintain the margin” between contract and spot prices, one buyer said. The buyer added that 140-142 cents/gal sounded “about right” for the November contract range.
Another buyer said he heard possible increases of 10-15 cents/cents/gal.
Methanex and Southern Chemical Corp (SCC) typically set the contract price. Their postings for October ranged 132-133 cents/gal.
US methanol spot barge prices soared by as much as 15% last week in a burst of buying that puzzled some sources, pushing spot above contract for the first time in two years.
Spot prices touched 136 cents/gal at one point during the move, more than 3 cents/gal higher than October contract rates and an 18.25 cent/gal jump over the previous week’s closing spot price.
The spike was attributed to production issues in Egypt and Trinidad & Tobago. Methanex has two methanol plants in Trinidad and one in Damietta, Egypt.
The Canada-based producer’s 1.8m tonne/year Atlas plant in Trinidad had gone down earlier this month for a catalyst change to coincide with ongoing natural gas curtailments on the Caribbean island.
Spot methanol on Wednesday reached 128 cents/gal, down 3% from last week’s close at 131-133 cents/gal.
Contract prices rarely move 10 cents/gal or more. It has happened only twice in the past two years, the last time in August 2011, when posted contract prices increased from 126-128 cents/gal to 137-138 cents/gal because of a plant outage in Trinidad.
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