02 November 2012 15:52 [Source: ICIS news]
LONDON (ICIS)--Tightness in the European methanol market has been made worse this week by delays to vessels en route from the Middle East, sources said on Friday.
The market has been tight for some weeks because of a range of production problems that have occurred since the end of the summer, but now sources say delays to multiple vessels bringing supplies from the Middle East have tightened the market further still.
“We are close to the tank bottoms, and I believe it has to be more than one vessel which is delayed for this to happen,” said a trader.
Tanks in Rotterdam are reportedly at extremely low levels and one trader said it has been forced to chase sellers for material it is owed.
Prices for prompt material hit €342/tonne ($44/tonne) FOB (free on board) Rotterdam this week, the highest yet seen in 2012.
Availability is unlikely to increase significantly even when the delayed vessels arrive, as most of the material on board will already be committed to buyers, sources said.
Some players said availability will improve by the second half of November or early December, although spot prices are not expected to fall below the net contract price level.
Others feel the tightness will roll forward to the end of the year as players will be looking to restock inventories and so all available volumes will be mopped up.
($1 = €0.77)
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