26 October 2012 08:45 [Source: ICB]
US methanol spot barge prices soared 8 cents/gal on 18 October, reaching 133 cents/gal on manic buying that some said was related to supply issues in Trinidad and Egypt.
Spot methanol began the week of 15 October at 120 cents/gal before jumping 5 cents/gal on 17 October and then moving into what one source called "crazy territory" mid-day on 18 October. Some methanol sources cited supply and demand reasons for the surge in buying.
"I suspect that the production issues in Egypt and Trinidad & Tobago have left a major buyer short," said one source.
Natural gas curtailments have become routine over the past 18 months on the Caribbean island because of repairs being done on offshore platforms.
Trinidad supplies 65-75% of US methanol imports in any given month, and the curtailments have reduced the country's production of methanol, ammonia and other chemicals.
Methanex has another methanol plant at the Point Lisas Industrial Estate in Trinidad, the 850,000 tonne/year Titan plant, but sources say it is running.
In Egypt, Methanex's 1.3m tonne/year Damietta plant was shut down from late August to late September, but suppliers suspect the plant is not running at high rates.
Some methanol sources said the manic buying made no sense. A buyer said the bid-offer spread reached 134-137 cents/gal early on the afternoon of 18 October. "That is insane," the buyer said.
The move puts spot prices essentially equal with contract prices of 132-133 cents/gal, which has not happened in more than two years.
There were a few weeks in May 2010 when the spread ranged only 1-3 cents/gal, and in October 2010 when the spread was 2-6 cents/gal.
The spread between US methanol contract and spot prices has been in the range 14.50-25.50 cents/gal for all of 2012.
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