26 October 2012 16:05 [Source: ICIS news]
LONDON (ICIS)--Spot prices in the European methanol market have eased off following sharp gains made last week, yet prompt material remains tight and the market is still fundamentally strong, sources said on Friday.
The most pronounced decrease was in December trading, which last week hit €340/tonne ($442/tonne) FOB (free on board) Rotterdam, but on Friday, material was offered at €325/tonne against no bids.
Prompt prices are still fairly strong, with October trading at a high of €332/tonne.
This is because while prompt availability is still very tight, the bullish sentiment with respect to the end of the year has cooled.
Many sources last week had suspected a new production outage was behind the increases in the early part of the week, which then resulted in exaggerated price hikes in the latter part of the week. No such outage has emerged and so players are less worried about securing volumes for December, which typically sees lower end user demand in any case.
There is also less concern over supplies following the announcement by Canada's Methanex that its 1.3m tonne/year plant in Damietta, Egypt, is running at 70%. Many players had believed the rate to be lower, or even that the plant was not running at all.
The spot market was generally much quieter this week than last, and buying interest was weaker, even for prompt material.
($1 = €0.77)
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